Napatech A/S: Q4 2022 Financial Results

28 Feb 2023 08:00 CET

(Copenhagen, 28 February 2023) Napatech A/S (“Napatech”, OSE: NAPA) reported
revenues of DKK 33.9 million in the fourth quarter of 2022 (55.0 million in the
fourth quarter of 2021), and an EBITDA of DKK -4.2 million (23.1), following the
challenging short-term market conditions as announced in November 2022 for the
updated outlook for the full year 2022. The company has recently announced
important customer agreements, a US-based technology company as new investor,
and expects revenues to grow to DKK 180-200 million in 2023.

“In the fourth quarter, we continued to feel the impact of the worldwide
recession on the tech industry, for many of our customers and Napatech leading
to a harsh end of 2022. We however strongly believe that our investments in new
technology during 2022 will ensure that Napatech stays competitive and well
positioned for the opportunities of the coming years as demonstrated by our
recent customer awards and our new US-based investor,” says Henrik Brill Jensen,
CEO of Napatech.

Napatech is a global leader of FPGA-based SmartNICs and IPUs focused on
high-speed solutions for cloud, mobile, telecom and enterprises with a goal of
putting a SmartNIC in every server requiring faster applications, better
networking and more effective security.

Napatech reported revenues of DKK 158.6 million in 2022, representing a decrease
of 19% from DKK 195.5 million in 2021, with an EBITDA* of DKK -20.1 million
(52.9). The net cash flow from operating activities ended at DKK -24.0 million
(15.0) for the year. At the end of 2022, Napatech had cash and cash equivalents
of DKK 12.0 million (39.4).

After the closing of 2022, Napatech announced an agreement with a US based
technology company for a USD 7.5 million investment in Napatech, which concluded
the previously announced strategic review.

“We´re pleased to welcome our new US based industrial investor, which holds
extensive industry expertise with strong market, customer and product knowhow.
The SmartNIC market is expected to grow significantly of the next years, and
strengthened by our new investor, Napatech is perfectly positioned to leverage
on our leadership position in this fast-growing domain,” Lars Boilesen, Chairman
of the Board of Directors in Napatech, commented in the announcement.

The company provides an outlook for 2023:

- Revenue in the range of DKK 180 – 200 million
- Gross margin 68-71%
- Staff expenses and other external costs in the range of DKK 160-170 million
- Staff costs transferred to capitalized development costs DKK 20-25 million

With performance in the middle of the guided ranges, revenue is expected to grow
20% and EBITDA will be negative DKK 10.5 million in 2023.

“In summary, we have experienced a difficult year from a business perspective,
however, it is our firm belief that we will see improvements as the technology
markets generally improve during 2023 and beyond. In addition, we have the
technology, competitiveness, and, last but not least, some very strong
partnerships supporting an amazing pipeline of current and future business
opportunities,” Henrik Brill concludes.

For more information, please see the attached report for the fourth quarter of
2022.

Napatech will host a webcast presentation and a conference call of its
Q4 2022 report today at 09:00 (CET).

The presentation will be delivered by webcast on:

https://app.webinar.net/8RqVgPGkQE3

Dial-in details for the conference call are:

DK: +45 89 87 50 45
NO: +47 81 50 33 08
US: +1 646 664 1960
UK: +44 20 3936 2999

Participant Access Code: 782813


*EBITDA and other alternative performance measures (APMs) are defined on page 4
in the attached report for Q4 2022.

For additional information, please contact:

Heine Thorsgaard, Chief Financial Officer
Phone: +45 4596 1500
E-mail: htg@napatech.com

Media inquiries:
Geir Bjørlo, Corporate Communications AS
Telephone: +47 915 40 000
E-mail: geir.bjorlo@corpcom.no


This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to section 5-12 of the Norwegian Securities Trading Act. This stock exchange
announcement was published by Heine Thorsgaard, CFO, Napatech A/S, on 28
February 2023 at 08:00 CET.

More information:
Access the news on Oslo Bors NewsWeb site

583774_Napatech Q4 2022 Interim Management Statement.pdf
583774_Napatech Q4 2022 Presentation.pdf