Napatech (NAPA) Q2 2024 earnings summary

Executive summary

• Achieved key milestones in strategic plan, including extended partnerships with Intel-Altera for next-gen 400G IPUs and new design wins with SigmaX.ai and tier-1 OEMs, expanding reach in cloud, AI, and 5G markets.

• Completed oversubscribed private placement in May 2024, raising DKK 143m/NOK 225M to accelerate R&D and business growth.

• Increased annual production volume guidance for design wins to 50,000–60,000 units, reflecting strong market demand.

Financial highlights

• H1 2024 revenue was $6.5 million (DKK 44.7m), down 40% year-over-year; Q2 2024 revenue was $3.4 million (DKK 23.2m), down 39% year-over-year.

• H1 2024 gross margin was 68% (up from 65.6% YoY); Q2 2024 gross margin was 65% (down 11 points YoY).

• H1 2024 EBITDA was negative DKK 51.7m; Q2 2024 EBITDA was negative DKK 28.2m.

• Net cash from operating activities in H1 2024 was negative DKK 47.4m; cash and cash equivalents at end of Q2 2024 were DKK 103.2m, up from DKK 56m a year earlier.

Outlook and guidance

• Targeting 4–6 design wins in 2024, with 50,000–60,000 units in peak annual production years; guidance reaffirmed.

• Annual revenue guidance is unlikely to be met due to weak H1 sales, but some upside possible if legacy business and new design wins ramp up in H2.

• Staff and external costs for 2024 expected to be DKK 170–180m, up from previous guidance.

• Gross margin guidance maintained at 69–71%.

• No plans for additional capital raise; company considers itself fully funded for at least 18 months.