Napatech A/S — Investor Presentation 2025

Feb 26, 2025

Interim Management Statement 4Q-2024

Lars Boilesen, CEO Heine Thorsgaard, CFO

February 26, 2025

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: 645165

To ask a question, press * 1 on your telephone keypad To withdraw your question, press * 2 Texted question can be submitted using the button on the website

Safe Harbor Statement

This presentation has been prepared by Napatech A/S (the "Company") 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 4Q and FY 2024
• Business Outlook
• Financial Review and Outlook
• Q&A Session

Business Status and Outlook

Business Status – 4Q and FY 2024

4Q-2024 and FY-2024 Financial Results:

Revenue: (4Q) \$5.4M USD (2024) \$16.8M USD Gross Margin: (4Q) 65% (2024) 68%

4Q and 2024 Highlights:

• Extended collaboration agreement with Intel-Altera for next-generation programmable NICs Intel partnership and new products expanded pipeline of opportunities unlocking transformational design wins and volumes
• Industry megatrends continue to fuel market growth and Napatech opportunity New customers, projects, applications, and use-cases regularly emerging, radically increasing Napatech's pipeline of opportunities
• Secured record breaking number of new design wins 4 new-product design wins, with the potential to consume 40k-60k+ units; and 36 total design wins in 2024.
• Expanded ecosystem to application software providers and appliance partners Partnerships extend go-to-market reach, creating additional visibility, awareness, and demand
• Enhanced company leadership to support Napatech's next phase of growth https://www.napatech.com/investor-relations/management-and-board/

Napatech Strategic Plan:

• Retain and expand our valuable installed base of customers
• Accelerate engineering in software and hardware to extend our Programmable NICs into high growth segments
• Developing our partner ecosystem to unlock high growth segments

Napatech At A Glance: Programmable Network Interface Cards

A Infrastructure Processing Unit B SmartNIC C GPU or FPGA for AI D Memory chip Link Think GPU or FPGA for AI

F Server

E Central Processing Unit

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

… providing access to CPUs and GPUs resources ✓ that deliver AI, security and other services

Can you please Get NVIDIA Out of my Network

Market Opening For Large Growth

8

Industry Megatrends Fueling Projected Market Growth

ARTIFICIAL INTELLIGENCE CLOUD-EDGE COMPUTING 5G MOBILE INFRASTRUCTURE CYBERSECURITY

FINTECH BIG DATA ANALYTICS MONITORING & RECORDING

Industry Megatrends Are The Launchpad For Programmable NICs New customers and projects regularly emerging that require enhanced server and network architectures

Applications Emerging

Application Performance Monitoring Network Performance Monitoring Packet Caaaaaaapture Test & Measurement Network Recording Regulatory and Compliance

EXAMPLE APPLICATIONS: Base Business New Design Wins

Pipeline Opportunities

SIEM Intrusion Detection Data Loss Prevention Extrusion Detection Network Forensics Intrusion Prevention Network Firewall Microservices Firewall

Enterprise Data Management

>50 Design Wins Market Simulation Low Latency Trading Market Data Capture Latency Monitoring High Frequency Trading

Lawful Interception Signaling Gateways User Plane Functions - Many

Tennant Services Iaas/PaaS Virtual Switching Offload Encryption, Compression Storage Offloads

Low Latency Inferencing AI Infrastructure Machine Learning

Programmable NICs: Early Winners Emerged

	TIME
REQUIREMENTS	FOUNDATIONAL NIC	OFFLOAD NIC	PROGRAMMABLE NICs
Street Name	Basic NIC	SmartNIC	SmartNIC	DPU	IPU
Processing Engines	ASIC	ASIC	FPGA	Controller, ASIC, ARM-SOC,	FPGA, x86 SOC
Onboard CPU
Scalability
CPU Offload
HW Programmable
SW Programmable
Throughput
Latency
Solution Price
Solution Power

Programmable NIC Product Strategy

Programmable NIC Software

Intel-Altera based SmartNIC Intel-Altera based IPU

APPLICATION DRIVEN

Napatech production grade solutions target high growth applications and services in modern networks

SOFTWARE FOCUSED

Link-Capture Link-Inline Link-Virtualization Link-Storage Link-Security

In success, people choose Napatech because we have the solution-focused software to power the Programmable NIC

HARDWARE INDEPENDENT Link-Hardware Link-Programmable

Napatech deliver production grade hardware planforms based on the latest technology from both Intel and Altera

Validation From New Pipeline Opportunities and Design Wins

CURRENT BUSINESS

• 400 unique customers in past 2 years

• Strong signals returning to base levels
• Primary customers depleting built-up inventory
• Opportunities emerging for new HW+SW products

PIPELINE

• Strong pipeline from Intel Altera
• Includes SmartNIC and IPU Programmable NICx
• Anchored by innovative software packages
• Spanning all customer types, applications and use cases

Q4 DESIGN WINS

• 8 design wins
• Spanning cybersecurity, monitoring, 5G, telecom
• Potential for more than 3500 units in volume production

FY24 DESIGN WINS

• 36 design wins
• Spanning all customer types, applications and use cases
• Transformational unit volumes and 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

Solution Spotlight – Artificial Intelligence Infrastructure

• AI inferencing Vendor
• AI infrastructure back end
• High-volume production
• N3070X SW and HW

"Traditional Front-end Networks Remain Vital as AI Back-end Network Investment Skyrocket " - Dell'Oro Feb 2024

Solution Spotlight: 5G Mobile Packet Core (UPF)

Please Visit Us At Mobile World Congress 2025

• WHEN: March 3-6, 2025 (Mon-Thurs)
• WHERE: Barcelona, Spain
• ACCESS: Napatech guest passes available
• SOLUTIONS: 5G Core UPF Acceleration Network Performance Monitoring Application Performance Monitoring Lawful Interception Signaling Gateways Cybersecurity
• DEMOS: Two Solution Kiosks

Financial Review and Outlook

Consolidated Income Statement Q4 2024

	Q	4	F	Y	Q 4	F Y
DKK'000	2024	2023	2024	2023	∆	∆
Revenue	37,678	58,081	116,408	182,674	-35%	-36%
of goods sold Cost	(13,069)	(12,483)	(37,049)	(49,126)
Gross profit	24,609	45,598	79,359	133,548	-46%	-41%
GM%	65%	79%	68%	73%
Staff costs	(27,521)	(22,404)	(111,226)	(96,924)	23%	15%
Other external costs	(17,230)	(16,066)	(60,618)	(46,361)	7 %	31%
EBITDAC	(20,142)	7,128	(92,485)	(9,737)
Transferred to capitalized development costs	3,153	872	6,232	9,299	262%	-33%
EBITDA	(16,989)	8,000	(86,253)	(438)
Depreciation, amortization and impairment	(6,762)	(8,172)	(29,326)	(32,461)	-17%	-10%
result Operating (EBIT)	(23,751)	(172)	(115,579)	(32,899)
Finance income	1,184	(49)	2,315	358
Finance costs	(959)	(1,977)	(3,823)	(3,904)
Result before tax	(23,526)	(2,198)	(117,087)	(36,445)
Income tax	5,075	5,510	5,830	4,429
Result for the period	(18,451)	3,312	(111,257)	(32,016)	-657%	248%

Key Developments

• Revenue in Q4 is up 11% compared to Q3 but down 35% compared to Q4'23.
• Adjusted for EOL product costs, GM in Q4 was 75%, and GM for FY 24 ended at 71%
• Staff costs in Q4 were on par with Q3 but up 23% compared to Q4'23 due to the build of development staff to serve the increased design win pipeline.
• Other external costs in Q4 up 7% compared to Q4'23 and up 31% FY compared to '23. The growth reflects additional development consultants, which is a flexible cost that can be taken up and down depending on the activity level.

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

Consolidated Cash Flow Statement Q4 2024

	Q 4		F Y
DKK'000	2024	2023	2024	2023
Earnings before tax (EBT)	(23,526)	(2,198)	(117,087)	(36,445)
Adjustments to reconcile profit before tax to net cash flows	9,565	10,886	41,733	38,543
Working capital adjustments	(24,058)	(11,147)	(31,341)	(10,404)
Cash flows from operating activities	(38,019)	(2,459)	(106,695)	(8,306)
Interest and tax	5,079	4,342	3,854	1,521
Net cash flows from operating activities	(32,940)	1,883	(102,841)	(6,785)
Net cash used in investing activities	(3,927)	(2,517)	(11,143)	(12,690)
Free cash flow	(36,867)	(634)	(113,984)	(19,475)
Net cash flows used in financing activities	(1,005)	(581)	136,699	50,507
in equivalents Net change cash and cash	(37,872)	(1,215)	22,715	31,032
Net foreign exchange difference	(649)	(665)	(741)	(627)
Cash and cash equivalents at the beginning of the period	102,862	44,247	42,367	11,962
Cash and cash equivalents at the end of the period	64,341	42,367	64,341	42,367
	2024	2023

working capital Net	98,643	65,462
of - NWC as % revenue in quarter	262%	113%

^• Free cash flow in Q4 negative DKK 36.9m

• Cash and cash equivalents of DKK 64.3m end of Q4'24 compared to DKK 42.4m end of Q4'23

2025 Expectations

• Napatech's financial expectations for 2025 are as follows:

	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
• With the expected net working capital improvements related to inventory reductions, our operations are funded throughout 2025.

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: 645165

To ask a question, press * 1 on your telephone keypad To withdraw your question, press * 2 Texted question can be submitted using the button on the website

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