Business
Napatech A/S : Presentation (Napatech Q4 2025 IMS Presentation)
Napatech A/S : Presentation (Napatech Q4 2025 IMS
About this update from Napatech A/s
Interim Management Statement 4Q and FY-2025 Kartik Srinivasan, CEO Klaus H. Skovrup, CFO February 26, 2026 Q4 2025 and FY2025 INVESTOR PRESENTATION 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: 791391 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 the website 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 statements that reflect management's current views with respect to future events and financial and operational performance. The words "believe," "expect," "anticipate," "intend," "may," "plan," "estimate," "should," "could," "aim," "target," "might," or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include but are not limited to the Company's ability to operate profitably, maintain its competitive position, to promote and improve its reputation, to successfully operate its strategy and the impact of changes in pricing policies, political and regulatory developments in the markets in which the Company operates, and other risks. The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, neither the Company nor its subsidiary undertakings or any of such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Agenda Leadership Update Market Opportunity & Target Segments Differentiated Product Portfolio Financial Updates & Outlook Strengthening Napatech's Leadership with Deep Industry Expertise BUSINESS STATUS AND OUTLOOK Q4 2025 and FY2025 Financial Highlights Q4 2025 Q4 2024 2025 2024 Q/Q Y/Y Revenue $7.9m $5.4m $22.4m $16.8m 48% 33% Gross Margin 70% 65% 69% 68% +5% points +1% point Staff & External Costs DKK 40.4m DKK 44.8m DKK 167.1m DKK 171.8m -10% -3% Q4 EBITDA DKK -3.8m DKK -17.0m DKK -58.6m DKK -86.3m DKK +13.2m DKK +27.7m Net Working Capital Reduced from DKK 98.6m (2024) to DKK 83.2m (4Q-2025) Net Cash Flow from operating activities Improved to DKK 11.4m (4Q-2025) from DKK -32.9m (4Q-2024) Cash and Equivalents DKK 127m (4Q-2025) up from DKK 117m (3Q-2025) Capital Raise NOK 200m / DKK 130.7m private placement to support expanding design win pipeline Disciplined Execution Driving Scalable Growth Technology Leadership Launched DPUs and SmartNICs for next wave of AI networking Extended collaboration with Altera and Intel for programmable NICs Developed complete solutions in high growth segments of AI, storage, cybersecurity R&D delivering on-time and to specifications to NRE-SOW specifications for key accounts Scalable Growth Core business strengthening across network packet monitoring, security, and storage AI Infrastructure momentum building in inference networking Expanded ecosystem of ISVs and OEMs extending go-to-market reach and demand generation Solutions increasingly repeatable and scalable across customer segments Design Win Focus Continued pipeline building in opportunities of transformational scale New customers, projects, applications and use-cases regularly emerging Pipeline growth driven by both direct engagement and partner ecosystem Secured 27 new design wins in 2025 Culture of Execution Strengthened leadership team aligned to segmented market strategy and solution focus Operating discipline centered on revenue alignment, feature velocity, and scalable delivery MARKET UPDATE Powering Critical Infrastructure for Performance & Efficiency Focused Market Strategy Across Core and AI Infrastructure Cybersecurity | Network Monitoring Capture and Replay | Deep Packet Inspection Telco Infrastructure | Financial Services SAM (2026 - 2030)* $6.5b $10b @ 12% CAGR Inference Pipeline Acceleration (MoE, RAG) Scale Up/Out Networking | Checkpoint Acceleration Storage Acceleration | Multi-Tenant Security SAM (2026 - 2030)* $6b $20b @ 35% CAGR * Source: Dell'Oro Group; Grand View Research; Light Reading; Mordor Intelligence; Napatech market modeling Structured Solutions Driving Scale and Strategic Growth Advanced performance-driven solutions Deep technical collaboration with customer Higher revenue & absolute margins Leveraging partner ecosystem Frontier Solutions Full-stack offerings Easier deployment Repeatable revenue Strong moat Turnkey Solutions Both Solutions will serve Core & AI Infrastructure Markets Idea is to transition cutting edge solutions from Frontier to Turnkey over time PIPELINE SPOTLIGHTS AI Infrastructure: Networking for AI Inferencing Ethernet based scale-out solution Line-rate performance under real-world load Flow-aware traffic steering and congestion control Hardware-accelerated traffic steering and flow control CPU offload and in-network processing Napatech Value Proposition SOURCE: ALTERA INNOVATOR DAY AI Infrastructure: Storage Acceleration Napatech Value Proposition Inline hardware-accelerated data reduction Deterministic low-latency data movement Flow-aware traffic steering and congestion control Offloaded security and data integrity processing CPU offload and in-network processing Financial Review and Outlook Quarterly Revenue and OPEX development Revenue mUSD & GM% OPEX mDKK 5.0 4.8 3.0 +48.2% +26.4% 70.3% 65.3% 66.9% 5.4 0.3 70.5% 6.3 0.2 7.9 0.2 69.9% 4.8 0.0 3.4 0.4 7.8 6.1 44.8 48.9 -9.7% 35.1 12.2 13.2 17.2 13.8 9.6 29.4 27.5 25.5 28.2 42.6 35.1 40.4 2024-Q4 2025-Q1 2025-Q2 2025-Q3 2025-Q4 2024-Q4 2025-Q1 2025-Q2 2025-Q3 2025-Q4 GM% NRE Product Revenue Other external costs Staff costs Consolidated Income Statement Q4 & FY 2025 4th quarter YTD Dec. Q4 YTD DKK'000 2025 2024 2025 2024 ∆ ∆ Revenue Cost of goods sold 51,056 (15,369) 37,678 (13,069) 146,609 (44,733) 116,408 (37,049) 36% 26% Gross profit 35,687 24,609 101,876 79,359 45% 28% GM% 69.9% 65.3% 69.5% 68.2% Staff costs (28,184) (27,521) (118,181) (111,226) 2% 6% Other external costs (12,246) (17,230) (48,906) (60,618) -29% -19% EBITDAC (4,743) (20,142) (65,211) (92,485) -76% -29% Transferred to capitalized development costs 928 3,153 6,609 6,232 -71% 6% EBITDA (3,815) (16,989) (58,602) (86,253) Depreciation, amortization and impairment (4,787) (6,762) (22,132) (29,326) -29% -25% Operating result (EBIT) (8,602) (23,751) (80,734) (115,579) Finance income 421 1,184 1,069 2,315 0% 0% Finance costs (668) (959) (5,454) (3,823) -30% 43% Result before tax (8,849) (23,526) (85,119) (117,087) Income tax 4,557 5,075 4,464 5,830 Result for the period (4,292) (18,451) (80,655) (111,257) Revenue in Q4 in USD was up 48% compared to Q4'24 (up 36% in DKK) Revenue in 2025 in USD up 33% compared to 2024 (up 26% in DKK) GM in Q4 of 69.9% was up + four basis points compared to Q4'24. GM in 2025 69.5% up 1.3 basis points compared to 2024 Staff costs and Other external costs in Q4 were down 10% compared to Q4 2024 Q4 EBITDA was negative of DKK 3.8m - up DKK 13.2m compared to Q4'24. Key Developments -77% -28% Quarterly movements in cash and Net Working Capital Cash & Cash equivalents, mDKK Net Working Capital, mDKK 83.2 -8.3 8.7 -8.4 Cash beginning of Q Net cash adjusted EBT WC adjustments Interest, tax, & currency gain/loss Investing activities Financing & foreign exch. diff. 117.7 -2.2 7.8 5.8 -1.3 -0.3 91.2 Cash end of Q 127.5 NWC Q3-25 Inventories Receivables Payables and provisions NWC Q4-25 Consolidated Cash Flow Statement Q4 & FY 2025 Net Cash flow from operating activities in Q4 was positive DKK 11.4m - 2025 negative DKK 32.9m Net working capital end of 2025 DKK 83.2m Free cash flow in Q4 was positive DKK 10.1m - up DKK 47.0m compared to Q4'24. Cash and cash equivalents of DKK 127.5m end of 2025. Key Developments 4th quarter YTD Dec. DKK'000 2025 2024 2025 2024 Earnings before tax (EBT) (8,849) (23,526) (85,119) (117,087) Adjustments to reconcile profit before tax to net cash flows 6,639 9,565 34,612 41,733 Working capital adjustments 7,789 (24,058) 12,310 (31,341) Cash flows from operating activities 5,579 (38,019) (38,197) (106,695) Interest and tax 5,797 5,079 5,254 3,854 Net cash flows from operating activities 11,376 (32,940) (32,943) (102,841) Net cash used in investing activities (1,287) (3,927) (9,287) (11,143) Free cash flow 10,089 (36,867) (42,230) (113,984) Net cash flows used in financing activities (11) (1,005) 107,733 136,699 Net change in cash and cash equivalents 10,078 (37,872) 65,503 22,715 Net foreign exchange difference (263) (649) (2,374) (741) Cash and cash equivalents at the beginning of the period 117,655 102,862 64,341 42,367 Cash and cash equivalents at the end of the period 127,470 64,341 127,470 64,341 2024 98,643 83,209 2025 Net working capital Financial outlook for 2026 Napatech will continue the current momentum and first orders from AI infrastructure will come in H2 Products for AI infrastructure comes with a lower gross margin Staff expenses & Other external costs to increase slightly compared to 2025, whereas staff costs transferred to capitalized development costs are in line with 2025 With performance in the middle of the guided ranges, EBITDA would be negative around DKK 25m Comments Guidance Untis sold 8,700-10,700 Revenue DKK 200 - 240m Gross margin 60 - 70% Staff expenses & Other external costs DKK 170 - 180m Staff costs transferred to capitalized development costs DKK 5 - 8m The company is exposed to risks that might affect our ability to reach our goals, such as currency fluctuations, general market uncertainty, and material changes in our large OEMs' needs for Napatech's products. Additionally, in 2025 and ongoing in 2026, we have seen increasing market uncertainty, particularly related to potential trade barriers, including tariff increases in the United States. With our products manufactured in the US and most of our customers also located in the US, we do not feel Visit us in 1H-2026 Mobile World Congress 2-5 March 2026 Barcelona, Spain 24-26 March 2026 Dubai, UAE 29 April 2026 London, UK 20 May 2026 New York, USA 2-4 June 2026 Prague, Czech Republic https://www.napatech.com/about/events/ 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: 791391 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 the website Stay Connected with Napatech On the web Social Media Other news www.euronext.com www.napatech.com www.google.com/alerts www.napatech.com/newsletter PRESENTATION