Napatech A/S : Report (Napatech Q1 2026 Interim Management Statement)

About this update from Napatech A/s

NAPATECH 1 ST QUARTER 2026 INTERIM MANAGEMENT STATEMENT MANAGEMENT'S REPORT Dear Readers, 2026 has started with solid execution. We continue to advance Napatech's strategy to become an indispensable acceleration platform for the AI data center era - strengthening our technology leadership, expanding our ecosystem, and building a foundation for scalable, long-term growth. In Q1 2026, revenue was $5.7M (DKK 36.6M), corresponding to 69% growth in USD and 53% growth in DKK versus Q1 2025. Gross margin was 70%, unchanged year-over-year. Key figures in the quarter included: EBITDA of negative DKK 18.1M (improved from negative DKK 29.1M in Q1 2025) Free cash flow of negative DKK 5.8M (improved from negative DKK 29.4M in Q1 2025) Net working Capital reduced from DKK 83.2M to DKK 72.8M Cash available of DKK 120.6M (down from DKK 127.6M in Q4 2025) We continue to invest in product development and customer engagements, while maintaining disciplined cost control. Staff costs and other external costs were DKK 44.5M in Q1 2026, down from DKK 48.9M in Q1 2025. We remain focused on executing our strategy in AI, storage, networking, cybersecurity, and fintech, and on converting our pipeline into revenue through continued customer engagement and partner collaboration. Our teams continue to meet demanding customer requirements, supporting design wins and strengthening our position in both the Core Infrastructure and AI Infrastructure segments. We continue to build our ecosystem with partners to extend our reach and deliver complete solutions to customers. Design wins remain a key driver of our future revenue, and we stay focused on building and converting our design-win pipeline. We continue to strengthen our organization to support the next phase of growth, ensuring we have the capabilities required to scale with customer demand. Looking ahead, our 2026 guidance remains unchanged. We will continue to execute with discipline, invest in key growth initiatives, and navigate a market environment that includes ongoing uncertainty-while focusing on long-term value creation. We remain focused on the priorities that will drive performance through 2026. Thank you for your continued support and belief in our vision. The best is yet to come! Best regards, Kartik Srinivasan Chief Executive Officer Highlights Q1: Revenue in USD amounted to 5.7M in Q1 2026, an increase of 69% compared to Q1 2025. In DKK, revenue amounted to DKK 36.6M in Q1 2026, an increase of 53% compared to Q1 2025. The gross margin in Q1 2026 was 70%, compared to 70% Q1 2025. Staff costs and Other external costs in Q1 2026 amounted to DKK 44.5M compared to DKK 48.9M in Q1 2025. EBITDAC1 in Q1 2026 amounted to negative DKK 18.9M compared to negative DKK 32.1M in Q1 2025. EBITDA in Q1 2026 amounted to negative DKK 18.1M compared to negative DKK 29.1M in Q1 2025. Depreciation, amortization, and impairment for Q1 2026 were DKK 3.3M compared to DKK 6.5M in Q1 2025. Net Cash flow from operating activities in Q1 2026 was negative DKK 4.8M compared to negative DKK 25.7M in Q1 2025. Net cash used in investing activities in Q1 2026 amounted to DKK 1.0M compared to DKK 3.7M in Q1 2025. Key figures 2 : Q 1 2026 Q 1 2025 Revenue USD M 5.7 3.4 Growth YoY USD M 69% 8% Revenue DKK M 36.6 23.8 Growth YoY DKK M 53% 11% Gross Margin 70% 70% EBITDAC DKK M -18.9 -32.1 EBITDA DKK M -18.1 -29.1 Net Cash Flow from Operating Activities DKK M -4.8 -25.7 Net Working Capital, end of period DKK M 72.8 97.2 Cash and cash equivalents, end of period DKK M 99.1 34.6 Unused credit facilities, end of period DKK M 21.5 1.0 Cash available, end of period DKK M 120.6 35.6 This is Napatech Napatech is a Danish tech company developing high-performance, programmable network interface cards and software for programmable NICs. The Napatech software suite ensures broad compatibility and seamless integration for our family of FPGA-based SmartNICs. With support for all major systems and a common API that easily integrates with custom-developed, open source, or commercial applications, we enable significantly reduced time-to-market for new products. Additional information is available at https://www.napatech.com investor. ‌1 EBITDAC: Earnings before depreciation, amortization and impairment, and cost transferred to development projects ‌2 Definitions: Gross Margin is calculated as 'Gross Profit' / 'Revenue'; EBITDAC is calculated as 'Earnings Before Interest, Taxes, Depreciation and Amortization' before staff costs transferred to capitalized development costs; EBITDA is calculated as 'Earnings Before Interest, Taxes, Depreciation and Amortization'; Net working capital represents the value of inventories, trade receivables and other current operating assets less trade payables and other current operating liabilities. Cash and cash equivalents and income tax receivable or payable are not part of the net working capital; Cash flows from operating activities are profit or loss before tax added or deducted changes in the net working capital, added or deducted changes in provisions and added the yearly depreciation and amortization; Free cash flow is net cash flow from operating activities added or deducted investing activities. Revenue and Gross Margin Q1 Napatech reports revenue of DKK 36.6M in Q1 2026 compared to DKK 23.8M in the same period in 2025, equivalent to an increase of 53%. In USD, revenue was up 69% compared to Q1 2025. The gross margin in Q1 2026 was 70% compared to 70% in Q1 2025. Costs Q1 Staff costs and Other external costs in Q1 2026 amounted to DKK 44.5M, compared to DKK 48.9M in Q1 2025. Operating expenses after transfer of staff costs to capitalized development costs in Q1 2026 amounted to DKK 43.7M, compared to DKK 45.8M in Q1 2025. EBITDAC and EBITDA Q1 EBITDAC amounted to negative DKK 18.9M in Q1 2026 compared to negative DKK 32.1M in Q1 2025. EBITDA in Q1 2026 was negative DKK 18.1M compared to negative DKK 29.1M in Q1 2025. Depreciation, amortization, and impairment Q1 Depreciation, amortization, and impairment in Q1 2026 were DKK 3.3M compared to DKK 6.5M in Q1 2025. Financial Items Q1 Financial items for Q1 2026 are positive DKK 0.0M compared to negative DKK 1.3M in Q1 2025. Taxes Q1 Taxes for Q1 2026 amounted to a cost of DKK 0.0M compared to an income of DKK 0.0M in Q1 2025. Investments Q1 Total net cash used in investing activities in Q1 2026 was DKK 1.0M, of which DKK 0.8M were related to new product development. In Q1 2025 total net cash used in investing activities was DKK 3.7M, of which DKK 3.4M was related to new product development. Cash Flow Q1 Net cash flow from operating activities in Q1 2026 was negative DKK 4.8M compared to negative DKK 25.7M in Q1 2025. Free cash flow in the quarter amounted to negative DKK 5.8M compared to negative DKK 29.4M in Q1 2025. Net cash from financing activities in Q1 2026 was negative DKK 22.7M, compared to positive DKK 0.5M in Q1 2025 due to the short-term credit facilities not being drawn. Outlook for 2026 2026 guidance remains unchanged: Target in DKK million Guidance Units sold 8,700-10,700 Revenue 200-240 Gross margin 60-70% Staff costs & Other external costs 170-180 Staff costs transferred to capitalized 5-8 development costs With performance in the middle of the guided ranges, EBITDA would be negative around DKK 25M, and units sold would be around 9,700. 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 the majority of our customers also located in the US, the group is not significantly exposed. However, the lack of predictability and uncertainty surrounding tariff increases is a concern, and we will be monitoring the development closely. Further, we have seen an elevated risk driven by a supply-constrained, high-volatile environment across several key areas. This leads to extended and volatile lead times as well as increased prices for certain components. Disclaimer: This report may contain statements regarding the future in connection with Napatech growth initiatives, profit figures, outlook, strategies, and objectives. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements. INCOME STATEMENT For the period ended March 31, 2026 1st quarter DKK'000 2026 2025 Revenue 36,588 23,849 Cost of goods sold (11,065) (7,078) Gross profit 25,523 16,771 Staff costs (33,143) (35,059) Other external costs (11,322) (13,846) EBITDAC (18,942) (32,134) Transferred to capitalized development costs 810 3,083 EBITDA (18,132) (29,051) Depreciation, amortization and impairment (3,301) (6,457) Operating result (EBIT) (21,433) (35,508) Finance income 317 27 Finance costs (299) (1,334) Result before tax (21,415) (36,815) Income tax (3) 6 Result for the period (21,418) (36,809) CASH FLOW STATEMENT For the period ended March 31, 2026 1st quarter DKK'000 2026 2025 Operating activities Income/Loss before tax (21,415) (36,815) Adjustments to reconcile profit before tax to net cash flow s Finance income (317) (27) Finance costs 299 1,334 Depreciation, amortisation and impairment 3,301 6,457 Share-based payment expense 2,496 2,766 Working capital adjustments Change in inventories (4,394) (5,009) Change in trade and other receivables and prepayments 13,962 2,528 Change in trade and other payables and contract liabilities 1,311 3,564 Interest received 263 27 Interest paid (299) (499) Income tax received, net - - Net cash flow s from operating activities (4,793) (25,674) Investing activities Purchase of tangible assets (187) (307) Investments in intangible assets (813) (3,439) Net cash used in investing activities (1,000) (3,746) Free cash flow (5,793) (29,420) Financing activities Capital increase 281 300 Payment of financial lease liabilities (801) (909) Proceeds from borrow ings - 1,144 Repayment of borrow ings (22,136) - Net cash flow s from financing activities (22,656) 535 Net change in cash and cash equivalents (28,449) (28,885) Net foreign exchange difference 32 (858) Cash and cash equivalents at the beginning of the period 127,470 64,341 Cash and cash equivalents at the end of the period 99,053 34,598 ASSETS DKK'000 31 Mar. 2026 31 Dec. 2025 31 Mar. 2025 Development projects, completed 5,130 6,910 14,876 Development projects, in progress 10,039 9,226 7,708 Patents 626 691 947 Intangible assets 15,795 16,827 23,531 Plant and equipment 2,967 3,401 4,447 Right-of-use assets 5,391 6,180 8,385 Leasehold improvements 362 404 406 Tangible assets 8,720 9,985 13,238 Leasehold deposits 1,636 1,636 1,587 Other non-current assets 1,636 1,636 1,587 Non-current assets 26,151 28,448 38,356 Inventories 61,072 56,678 74,885 Trade receivables 24,116 37,733 14,549 Prepayments 4,403 4,446 4,704 Other receivables 12,503 12,350 26,118 Income tax receivable 4,815 4,830 6,316 Cash and cash equivalents 99,053 127,470 34,598 Current assets 205,962 243,507 161,170 Total assets 232,113 271,955 199,526 EQUITY AND LIABILITIES DKK'000 31 Mar. 2026 31 Dec. 2025 31 Mar. 2025 Share capital 27,556 27,535 25,013 Share premium 607,310 606,871 483,599 Treasury shares (619) (619) (619) Foreign currency translation reserve (999) (1,387) 20 Share-based payment reserve 20,549 25,120 21,420 Retained earnings (467,356) (452,827) (410,285) Equity 186,441 204,693 119,148 Interest-bearing loans and borrow ings 4,180 4,678 6,382 Other non-current financial liabilities 4,314 4,652 4,540 Non-current lease liabilities 2,533 3,349 5,619 Non-current contract liabilities 1,945 1,344 1,764 Non-current liabilities 12,972 14,023 18,305 Interest-bearing loans and borrow ings 2,074 23,374 37,666 Current lease liabilities 3,227 3,211 3,123 Trade payables 12,335 8,109 7,337 Other payables 10,142 12,712 10,706 Contract liabilities 4,922 5,833 3,241 Current liabilities 32,700 53,239 62,073 Total liabilities 45,672 67,262 80,378 Total equity and liabilities 232,113 271,955 199,526 Napatech A/S Tobaksvejen 23A, 1 DK-2860 Søborg Denmark CVR no. 10109124 Phone: +45 4596 1500 https://www.napatech.com

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