Napatech A/S

Investor Presentation • Aug 26, 2025

2025 Half-Year Report

Lars Boilesen, CEO Heine Thorsgaard, CFO

August 26, 2025

© NAPATECH 2025

Q&A Session Following the presentation

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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

• BUSINESS STATUS
• MARKET UPDATE
• PIPELINE SPOTLIGHT
• FINANCIAL RESULTS
• OUTLOOK

BUSINESS STATUS

Financial Results

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• 2Q-2025 Revenue \$4.8M USD, +43% year over year • 2Q-2025 Gross Margins 67%, as expected, +2% year over year • 1H-2025 Revenue Revenue up 26% compared to 1H24 • 3Q-2025 Good start to 3Q-2025

Recent Highlights

• Executing Strategy Completed 200M NOK capital raise to support business growth Appointed three new members to board of directors

• Business Growth Continue pipeline building in opportunities of transformational scale Base business strengthening, growing in valuable accounts and use cases Lead customer Netscout commits to increased product volume

• Design Win Focus Successful progress in new design wins, leading to new revenue sources Tier-1 server vendor, d-Matrix, Broadcom Symantec, Eideticom, Myrle.AI, Xelera, A5G and more

MARKET UPDATE Limitless AI powered by networks that think

NAPATECH NETWORK INTERFACE CARDS – The Heart of Modern AI Datacenters

ACCELERATED PROCESSING PROGRAMMABLE NETWORKING SUSTAINABLE COST

Offload and accelerate burdensome CPU network, security, storage processing Hardware performance at the speed of Software innovation

Rearchitect servers to remove ROI constraints from space, power and cooling

Napatech Network Interface Cards

Early cases emerging

Hyperscale Cloud Operators

DEPLOYED NOW

8 global companies Initially niche, bespoke Component self-built DIY Not for sale Intel-Altera dominance >12M cards in 2024

EMERGING NOW: 5000+ mass market

OPPORTUNITY: OUR TIME TO SHINE IS NOW

OPPORTUNITY: APPLICATIONS THAT BENEFIT FROM NAPATECH NICS

CLOUD AND ARTIFICIAL INTELLIGENCE

AI Infrastructure AI Coprocessing AI Storage Acceleration Network Offload

BUSINESS CRITICAL APPLICATIONS

Cybersecurity Fintech Financial Services Regulatory Compliance Network Forensics

NETWORK INFRASTRUCTURE

Application and Network Monitoring 5G Mobile Infrastructure Capture and Replay Deep Packet Inspection

PRODUCT: Napatech Network Interface Cards and CPU Co-Processors

Napatech's Advanced NICs play a crucial role in modern datacenter designs …

… providing access to CPU and GPU resources ✓ that deliver AI, security and other services

BUSINESS MODEL: INNOVATE GO-TO-MARKET LOWERS OPEX AND INCREASES SCALABILITY

PIPELINE SPOTLIGHTS

New Design Win Pipeline

• Nearly 200 opportunities, >60% in new business and markets
• \$400M in value, >80% in new business and markets
• Includes SmartNIC and DPU (IPU) Programmable NICs
• New business volumes: 1k, 5k, 10k, 25k+
• Current design wins contribute 60k-80k units in peak production
• Anchored by innovative software packages
• Spanning customer types, applications and use cases
• Altera regularly adding opportunities
• Napatech inbound leads noticeably up, web, organic, referral

Base Business Strengthening

• Over 400 base customers • Design wins and sales increasing • Higher ASP (SW), at lower relative volumes • Lead customer volume commitments and projections • Top-10 cybersecurity company first \$1M quarter • Four leading banking fintech exceed \$1.5M • Other use cases exceed \$1M
• Attractive pipeline with 2H25 line of site
• Midway through Q3 we project 20-30% year over year revenue

The improving base business, plus constantly expanding pipeline of opportunities and early success in new design wins provides great optimism towards realizing our growth ambitions

CASE STUDY: TIER-1 SERVER OEM

HARDWARE SOFTWARE

Butterfly Standalone SmartNIC (N3070X)

1RU IPU (F3070X)

Stacked 2RU IPU (F3070X)

NETWORKING STORAGE SECURITY INFRASTRUCTURE MANAGEMENT AND MORE….

AI STORAGE CONNECTIVITY CLOUD STORAGE AI CONTENT AND DATA REDUCTION CLOUD TENNANT SERVICES 5G MOBILE INFRASTRUCTURE PARALLEL FILE SYSTEM

• On time delivery of all hardware, exceeding customer expectations

USE CASES

• Transitioning to software requirements per use case, stunning metrics

Land-and-expand from initial engagement to 6 unique opportunities

CASE STUDY: ARTIFICIAL INTELLIGENCE INFRASTRUCTURE FOR INFERENCING

• AI inferencing vendor win, d-Matrix
• AI infrastructure back-end network
• High-volume production
• Hardware win reuse of tier-1 server HW design
• Commitments: units, NRE fee
• 5-year supply agreement
• Development ahead of schedule, mileposts met
• Target Napatech completion in 4Q 2025
• Analysts continue to expand projections of non-GPU co-processors for AI inferencing
• Hunting for opportunities to replicate

New Design Wins: Early Signs of Progress and Success

• Cybersecurity
• Data loss prevention
• Product complete

• 5x performance

• First new customer
• US global banking
• ~\$250k design

• 5G Packet core
• UPF offload
• Link-Inline SW
• First dev orders
• First customer win

• On towers Q4/Q1

• Kontron
• Edge server
• 5G UPF offload

• Disclosed design win
• Customer launch GA
• Microsecond machine learning and inferencing

STAC Summit New York 2025 28 October 2025 New York, USA

SuriCon 19-21 November 2025 Montreal, Canada

30 September 2025 San Jose, USA

https://go.altera.com/innovators-day-2025-registration

Financial Review and Outlook

Consolidated Income Statement Q2 & H1 2025

	Q 2		H 1		Q 2	H 1
DKK'000	2025	2024	2025	2024	∆	∆
Revenue	31 ,571	23 ,176	55,420	44 ,718	36%	24%
of goods sold Cost	(10 445) ,	(8 ,105)	(17,523)	(14 217) ,
profit Gross	21 ,126	15,071	37 897 ,	30 ,501	40%	24%
GM%	6 6.9%	6 5.0%	6 8.4%	6 8.2%
Staff costs	(29 443) ,	(28 ,581)	(64 ,502)	(56 339) ,	3 %	14%
Other external costs	(13 ,165)	(14 ,726)	(27 011) ,	(27 ,562)	-11%	-2%
EBITDAC	(21 482) ,	(28 236) ,	(53 616) ,	(53 400) ,
Transferred capitalized development to costs	1,843	867	4 926 ,	1,716	113%	187%
EBITDA	(19 639) ,	(27 369) ,	(48 690) ,	(51,684)
and Depreciation, amortization impairment	(5,870)	(7,699)	(12 327) ,	(15,643)	-24%	-21%
result Operating (EBIT)	(25 ,509)	(35 068) ,	(61 017) ,	(67 327) ,
Finance income	182	373	209	1,206
Finance costs	(2 907) ,	(1,112)	(4 241) ,	(1,869)
Result before tax	(28 234) ,	(35 807) ,	(65 049) ,	(67 990) ,
Income tax	(100)	747	(94)	745
Result for the period	(28 334) ,	(35 060) ,	(65 ,143)	(67 245) ,	-19%	-3%

EBITDAC: Earnings before depreciation, amortization and impairment, and staff cost transferred to development projects

Key Developments

• Revenue in Q2 in USD up 43% compared to Q2'24 (up 36% in DKK). Revenue in H1 in USD up 26% compared to H1'24.
• GM in Q2 67% up two basis points compared to Q2'24. GM in H1 68.4% up 0.2 basis points compared to H1'24.

• Q2 EBITDA negative DKK 19.6m – up DKK 7.7m compared to Q2'24.

Consolidated Cash Flow Statement Q2 & H1 2025

	Q 2		H 1
DKK'000	2025	2024	2025	2024
Earnings before tax (EBT)	(28,234)	(35,807)	(65,049)	(67,990)
Adjustments reconcile profit before cash flows to tax to net	10 644 ,	11 131 ,	21 174 ,	21 013 ,
Working capital adjustments	(377)	(16 312) ,	706	910
Cash flows from operating activities	(17,967)	(40,988)	(43,169)	(46,067)
Interest and tax	(676)	(950)	(1 148) ,	(1 309) ,
Net cash flows from operating activities	(18,643)	(41,938)	(44,317)	(47,376)
Net cash used in investing activities	(2,536)	(2,682)	(6,282)	(3,691)
Free cash flow	(21,179)	(44,620)	(50,599)	(51,067)
Net cash flows used in financing activities	121,062	120,161	121,597	111,727
Net change in cash and cash equivalents	99,883	75,541	70,998	60,660
Net foreign exchange difference	(1 070) ,	147	(1 928) ,	179
Cash and cash equivalents at the beginning of the period	34 598 ,	27 518 ,	64 341 ,	42 367 ,
Cash and cash equivalents the end of the period at	133,411	103,206	133,411	103,206

	2025	2024
working capital Net	95 ,153	65 241 ,

Key Developments

• Net Cash flow from operating activities in Q2 negative DKK 18.6m – H1 negative DKK 44.3m
• Net working capital end of Q2 DKK 95.2m

• Free cash flow in Q2 negative DKK 21.2m up DKK 23.4m compared to Q2'24.
• Cash and cash equivalents of DKK 133.4m end of Q2 25.

NWC Improvement Initiatives

• During 2025, we have planned and implemented several improvement initiatives aimed at reducing our Net Working Capital in the second half of 2025 and through 2026.
• The key initiatives to improve the Napatech NWC focus on:
  • Reducing inventory levels and optimizing the planning of future product production
  • Negotiating better payment terms with key suppliers & current customers
  • Optimizing payment terms and sourcing model for new high-volume agreements
• In the coming years, we anticipate that most of our new business will stem from large-volume orders rather than production for stock. This shift will lead to an even more optimized logistics setup with a significantly lower need for working capital.

Contract liabili es Non current contract liabili es Other payables rade payables

2025 Expectations

• Napatech's financial expectations for 2025 remain unchanged:

	Guidance
Revenue	DKK 150-190m
Gross margin	69-71%
Staff expenses & Other external costs	DKK 170-180m
Transferred to capitalized development costs	DKK 8-12m

• With performance in the middle of the guided ranges in 2025, EBITDA will be negative 46mDKK

FINANCIAL OUTLOOK: KEY PERFORMANCE INDICATORS

• increasing demand among mass-market customers
• High gross margins enabled by the strong software component in Napatech's products, which also promote customer stickiness
• Opex reduced through rightsizing the organization while still enabling growth starting q325
• Additionally, net working capital is expected to drastically improve due to new model taking orders before incurring expenses

Q&A Session Following the presentation

DK: +45 89 87 50 45 UK: +44 20 3936 2999 US: +1 646 233 4753 All other locations: +44 20 3936 2999

Access Code: 120993

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

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