Interim report
Page 1
NAPATECH HALF-YEAR REPORT 2026
Page 2
Napatech HALF-YEAR REPORT 2026 page 2 of 17 MANAGEMENT'S REPORT Dear Readers, The first half of 2026 marked an important period of progress for Napatech. We delivered strong growth in our Core Infrastruc ture business, advanced our AI Infrastructure strategy from design wins toward production, and expand ed the customer and partner ecosystem that supports our long-term growth ambitions. Revenue for the first half was $13.1 million (DKK 84.7 million), representing growth of 61% in USD and 53% in DKK compared with H1 2025, while maintaining a gross margin of 68%. This performance reflects the continued strength and quality of our Core Infrastructure business, which remains a strong foundation for Napatech. At the same time, we are seeing encouraging progress in AI Infrastructure. During the first half, a major AI inference design win progressed into production with an initial production order. Following the end of the period, we received a significant follo w-on production order, signaling the start of scaling to higher production volumes. This transition validates both our technology and our strategy in AI Infrastructure. As AI inference moves toward large -scale production, we believe the architecture of the underlying infrastructure is changing. Efficiently moving and processing data across increasingly heterogeneous compute environments is becoming critical to overall system performance. We see a differentiated role for Napatech in this evolving architecture, with our programmable NIC technology combining high-performance hardware and software to enable efficient, programmable data movement across heterogeneous AI systems. We are also strengthening our broader customer and partner ecosystem. Our design-win pipeline is expanding across both Core and AI Infrastructure, while strategic relationships are broadening our routes to market and creating opportunities to participate in larger infrastructure deployments. Converting these opportunities into production remains one of our highest priorities. We are making this progress while maintaining financial discipline. EBITDA improved to negative DKK 24.8 million in H1 2026 f rom negative DKK 48.7 million in H1 2025, while staff costs and other external costs declined to DKK 85.6 million from DKK 91.5 m illion. We continue to balance investment in product development and customer engagements with disciplined management of our cost base. Free cash flow was negative DKK 41.1 million compared with negative DKK 50.6 million in H1 2025. Net working capital increase d to DKK 99.1 million, primarily reflecting backloaded invoicing in Q2 and increased inventory as we prepare for expected demand in the second half. Cash available at the end of H1 was DKK 84.3 million. Looking ahead, our 2026 revenue guidance remains unchanged. Our priorities are clear: continue the momentum in our Core Infrastructure business, convert our growing pipeline into production revenue, support the scaling of our AI Infrastructure programs, and execute with financial discipline. We entered 2026 focused on positioning Napatech for its next phase of growth. At the halfway point, we are making tangible progress. Our Core business is demonstrating strength, our AI Infrastructure opportunities are advancing toward scale, and our technology is increasingly relevant to the evolving architecture of the data center. Thank you to our employees, customers, partners and shareholders for your continued support. Best regards, Kartik Srinivasan Chief Executive Officer
Page 3
Napatech HALF-YEAR REPORT 2026 page 3 of 17 Highlights H1: • Revenue in USD amounted to 13.1M in H1 2026, an increase of 61% compared to H1 2025. In DKK, revenue amounted to 84.7M, an increase of 53% compared to H1 2025. • The gross margin in H1 2026 was 68% compared to 68% in H1 2025. • Staff costs and Other external costs in H1 2026 amounted to DKK 85.6M compared to DKK 91.5M in H1 2025. • EBITDAC1 in H1 2026 amounted to negative DKK 27.8M compared to negative DKK 53.6M in H1 2025. • EBITDA in H1 2026 amounted to negative DKK 24.8M compared to negative DKK 48.7M in H1 2025. • Depreciation, amortization, and impairment for H1 2026 were DKK 5.9M compared to DKK 12.3M in H1 2025. • Net Cash flow from operating activities in H1 2026 was negative DKK 36.9M compared to negative DKK 44.3M in H1 2025. • Net working capital end of H1 2026 amounted to DKK 99.1M compared to DKK 95.2M end of H1 2025 and DKK 83.2M end of 2025. • Net cash used in investing activities in H1 2026 amounted to DKK 4.3M compared to DKK 6.3M in H1 2025. • Cash and cash equivalents at the end of H1 2026 amounted to DKK 62.7M compared to DKK 133.4M at the end of H1 2025. • Cash available at the end of H1 2026 amounted to DKK 84.3M compared to DKK 136.8M at the end of H1 2025. Highlights Q2: • Revenue in USD amounted to 7.4M in Q2 2026, an increase of 55% compared to Q2 2025. In DKK, revenue amounted to 48.1M, an increase of 52% compared to Q2 2025. • The gross margin in Q2 2026 was 67% compared to 67% in Q2 2025. • Staff costs and Other external costs in Q2 2026 amounted to DKK 41.2M compared to DKK 42.6M in Q2 2025. • EBITDAC in Q2 2026 amounted to negative DKK 8.8M compared to negative DKK 21.5M in Q2 2025. • EBITDA in Q2 2026 amounted to negative DKK 6.6M compared to negative DKK 19.6M in Q2 2025. • Depreciation, amortization, and impairment for Q2 2026 were DKK 2.6M compared to DKK 5.9M in Q2 2025. • Net Cash flow from operating activities in Q2 2026 was negative DKK 32.1M compared to negative DKK 18.6M in Q2 2025. • Net cash used in investing activities in Q2 2026 amounted to DKK 3.3M compared to DKK 2.5M in Q2 2025. Key figures2: Q2 2026 Q2 2025 YTD 2026 YTD 2025 Revenue USD M 7.4 4.8 13.1 8.2 Growth YoY USD M 55% 43% 61% 26% Revenue DKK M 48.1 31.6 84.7 55.4 Growth YoY DKK M 52% 36% 53% 24% Gross Margin 67% 67% 68% 68% EBITDAC DKK M -8.8 -21.5 -27.8 -53.6 EBITDA DKK M -6.6 -19.6 -24.8 -48.7 Net Cash Flow from Operating Activities DKK M -32.1 -18.6 -36.9 -44.3 Net Working Capital, end of period DKK M 99.1 95.2 99.1 95.2 Cash and cash equivalents, end of period DKK M 62.7 133.4 62.7 133.4 Unused credit facilities, end of period DKK M 21.6 3.4 21.6 3.4 Cash available, end of period DKK M 84.3 136.8 84.3 136.8 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 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, Ta xes, Depreciation and Amortization’ before staff costs transferred to capitalized development costs; EBITDA is calculated as ‘Earni ngs Before Interest, Taxes, Depreciation and Amortization’; Net working capital represents the value of inventories, trade receivables of other current operating assets less trade payables and other curren t 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 yea rly depreciation and amortization; Free cash flow is net cash flow from operating activities added or deducted investing activities.
Page 4
Napatech HALF-YEAR REPORT 2026 page 4 of 17 Revenue and Gross Margin H1 Napatech reports revenue of DKK 84.7M in the first half of 2026 compared to DKK 55.4M in the same period in 2025, equivalent to an increase of 53%. In USD, revenue was up 61% compared to H1 2025. The gross margin in H1 2026 was 68% compared to 68% in H1 2025. Q2 Napatech reports revenue of DKK 48.1M in Q2 2026 compared to DKK 31.6M in the same period in 2025, equivalent to an increase of 52%. In USD, revenue grew 55% compared to Q2 2025. The gross margin in Q2 2026 was 67% compared to 67% in Q2 2025. Costs H1 Staff costs and Other external costs in H1 2026 amounted to DKK 85.6M, compared to DKK 91.5M in H1 2025. Operating expenses after transferal of staff costs to capitalized development costs in H1 2026 amounted to DKK 82.6M, compared to DKK 86.6M in H1 2025. Q2 Staff costs and Other external costs in Q2 2026 amounted to DKK 41.2M, compared to DKK 42.6M in Q2 2025. Operating expenses after transferal of staff costs to capitalized development costs in Q2 2026 amounted to DKK 39.0M, compared to DKK 40.8M in Q2 2025. EBITDAC and EBITDA H1 Earnings before Interest, Tax, Depreciation, Amortization, and Capitalization of development cost (EBITDAC) amounted to negative DKK 27.8M in H1 2026 compared to negative DKK 53.6M in H1 2025. EBITDA in H1 2026 was negative DKK 24.8M compared to negative DKK 48.7M in H1 2025. Q2 EBITDAC amounted to negative DKK 8.8M in Q2 2026 compared to negative DKK 21.5M in Q2 2025. EBITDA in Q2 2026 was negative DKK 6.6m compared to negative DKK 19.6M in Q2 2025. Depreciation, amortization, and impairment H1 Depreciation, amortization, and impairment in H1 2026 were DKK 5.9M compared to DKK 12.3M in Q2 2025. Q2 Depreciation, amortization, and impairment in Q2 2026 were DKK 2.6M compared to DKK 5.9M in Q2 2025. Financial Items H1 Financial items for H1 2026 were negative DKK 0.2M compared to a negative DKK 4.0M in H1 2025. H1 2025 was impacted by transaction costs related to the capital increase. Q2 Financial items for Q2 2026 were negative DKK 0.2M compared to a negative DKK 2.7M in Q2 2025. Q2 2025 was impacted by transaction costs related to the capital increase. Taxes H1 Taxes for H1 2026 amounted to a cost of DKK 0.7M compared to a a cost of DKK 0.1M in H1 2025. Q2 Taxes for Q2 2026 amounted to a cost of DKK 0.7M compared to a cost of DKK 0.1M in Q2 2025. Investments H1 The total net cash used in investing activities in H1 2026 was DKK 4.3M, of which DKK 3.3M was invested in new product development. In H1 2025, the total net cash used in investing activities was DKK 6.3M, of which DKK 5.7M was invested in new product development. Q2 The total net cash used in investing activities in Q2 2026 was DKK 3.3M, of which DKK 2.5M was invested in new product development. In Q2 2025, the total net cash used in investing activities was DKK 2.5M, of which DKK 2.2M was invested in new product development. Cash Flow H1 Net cash flow from operating activities in H1 2026 was negative DKK 36.9M compared to negative DKK 44.3M in H1 2025. H1 2026 was impacted by a negative development in working capital primarily due to invoicing being backloaded in Q2 2026 and ramp-up of inventories to meet the expected demand in H2 2026. Free cash flow in H1 2026 amounted to negative DKK 41.1M compared to negative DKK 50.6M in H1 2025. Net cash from financing activities in H1 2026 was negative DKK 23.5M, compared to positive DKK 121.6M in H1 2025. H1 2025 was positively impacted by the capital raise last year, whereas H1 2026 is negatively impacted by short-term credit facilities not being drawn. Cash and cash equivalents at the end of H1 2026 was DKK 62.7M compared to DKK 133.4M at the end of H1 2025. Q2 Net cash flow from operating activities in Q2 2026 was negative DKK 32.1M compared to negative DKK 18.6M in Q2 2025 . Q2 2026 was impacted by a negative development in working capital primarily due to invoicing
Page 5
Napatech HALF-YEAR REPORT 2026 page 5 of 17 being backloaded in Q2 2026 and ramp-up of inventories to meet the expected demand in H2 2026. Free cash flow in the quarter amounted to negative DKK 35.3M compared to negative DKK 21.2M in Q2 2025. Net cash from financing activities in Q2 2026 was negative DKK 0.8M, compared to a positive DKK 121.1M in Q2 2025 . Q2 2025 was positively impacted by the capital raise last year. Changes in equity The company's equity amounted to DKK 179.1M on June 30, 2026, this is a decline of DKK 25.6M from December 31, 2025. In H1 2026, Group equity decreased by the comprehensive income with DKK -31.1M and increased with DKK 5.5M by transactions with shareholders. Shareholders and Share Information Napatech, as of June 30, 2026, had 110,442,933 shares, each with a nominal value of DKK 0.25. The share capital is DKK 27,610,733.25, divided among the 3,814 shareholders. Events after the end of the period No significant events occurred after the end of the reporting period. Outlook for 2026 2026 guidance: Target in DKK million Guidance Revenue 200-240 Units sold 7,700-9,700 (previously 8,700-10,700) Gross margin 60-70% Staff costs & Other external costs 170-180 Staff costs transferred to capitalized development costs 5-8 While the revenue guidance is maintained, the guidance for units sold has been adjusted based on the results for the first half year and expectations for the second half year of 2026. The demand moves towards higher -speed, higher-value products, which carry higher average selling prices. As that mix continues to evolve, revenue growth will not necessarily translate proportionally into unit growth. Furthermore, we are expecting lower units to be sold within the AI Infrastructure segment in 2026 than originally anticipated. With performance in the middle of the guided ranges, EBITDA would be negative at 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 acro ss 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 's 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 those expressed or implied in such statements. Investor Number of shares % of total SUNDT AS 18,307,427 16.58% VERDANE CAPITAL VIII K/S 10,013,618 9.07% ARBEJDSMARKEDETS TILLAEGSPENSION 7,800,000 7.06% LUDVIG LORENTZEN AS 6,800,000 6.16% DNB BANK ASA 4,182,560 3.79% BROWNSKE BEVEGELSER AS 4,030,483 3.65% BANK PICTET & CIE (EUROPE) AG 3,308,329 3.00% MANARA AS 2,605,000 2.36% DANSKE BANK A/S 2,324,722 2.10% VERDIPAPIRFONDET DNB SMB 2,121,991 1.92% BAHIA AS 2,120,280 1.92% PRIVATE INVESTOR 2,005,244 1.82% AREPO AS 1,915,200 1.73% THE BANK OF NEW YORK MELLON 1,879,749 1.70% NORDNET BANK AB 1,405,075 1.27% MP PENSJON PK 1,323,999 1.20% J.P. MORGAN SE 1,304,638 1.18% OSM FREDENLUND AS 1,135,232 1.03% FOLKETRYGDFONDET 1,132,701 1.03% F2 FUNDS AS 1,045,000 0.95% Total number owned by top 20 76,761,248 69.50% Total -20 other shareholders 33,681,685 30.50% Total Number of shares 110,442,933 100.00%
Page 6
Napatech HALF-YEAR REPORT 2026 page 6 of 17 MANAGEMENT STATEMENT The Board of Directors and the Executive Management have considered and adopted the interim report of Napatech Group for the period from January 1 to June 30, 2026. The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the EU, and additional Danish interim reporting requirements for listed companies. In our opinion, the interim report gives a true and fair view of the Group 's assets, liabilities, and financial position on June 30, 2026, and of the results of the Group's operations and cash flows for the period January 1 to June 30, 2026. We find that the Management's commentary provides a fair statement of developments in the activities and financial situation of the Group, financial results for the period , and the general financial position of the Group , and describes the major risks and elements of uncertainty faced by the Group. The term Company below refers as well to the Group. The interim report is unaudited and has not been reviewed by the company's auditors. Søborg, August 25, 2026 Executive Management Kartik Srinivasan, Chief Executive Officer Board of Directors Lars Boilesen, Chairman Christian Jebsen Lynn A. Comp Patty Kummrow Shannon Poulin Zane Ball
Page 7
Napatech HALF-YEAR REPORT 2026 page 7 of 17 INCOME STATEMENT For the period ended June 30, 2026 DKK'000 Note 2026 2025 2026 2025 R evenue 3 48,087 31,571 84,675 55,420 Cost of goods sold (15,738) (10,445) (26,803) (17,523) Gross p rofit 32,349 21,126 57,872 37,897 Staff costs (31,557) (29,443) (64,700) (64,502) Other external costs (9,605) (13,165) (20,927) (27,011) EBITDA C (8,813) (21,482) (27,755) (53,616) Transferred to capitalized development costs 2,195 1,843 3,005 4,926 EBITDA (6,618) (19,639) (24,750) (48,690) Depreciation, amortization and impairment (2,625) (5,870) (5,926) (12,327) Op erating result (EBIT) (9,243) (25,509) (30,676) (61,017) Finance income 108 182 425 209 Finance costs (335) (2,907) (634) (4,241) R esult b efore tax (9,470) (28,234) (30,885) (65,049) Income tax (718) (100) (721) (94) R esult for the p eriod (10,188) (28,334) (31,606) (65,143) Earnings / (loss) p er share: 4 2026 2025 Basic, DKK (0.29) (0.64) Diluted, DKK (0.29) (0.64) H1 H12nd q uarter STATEMENT OF COMPREHENSIVE INCOME For the period ended June 30, 2026 DKK'000 2026 2025 R esult for the p eriod (31,606) (65,143) Items that may be reclassified to profit and loss in subsequent periods: Exchange differences on translation of foreign operations 524 (1,835) Net other comprehensive income / (loss) to be reclassified to profit or loss in subsequent periods 524 (1,835) Total other comprehensive income / (loss) for the period, net of tax 524 (1,835) Total comprehensive income / (loss) for the period, net of tax (31,082) (66,978) H1
Page 8
Napatech HALF-YEAR REPORT 2026 page 8 of 17 CASH FLOW STATEMENT For the period ended June 30, 2026 DKK'000 2026 2025 2026 2025 Op erating activities Income/Loss before tax (9,470) (28,234) (30,885) (65,049) A d justments to reconcile p rofit b efore tax to net cash flows Finance income (108) (182) (425) (209) Finance costs 335 2,907 634 4,241 Depreciation, amortisation and impairment 2,625 5,870 5,926 12,327 Share-based payment expense 2,232 2,049 4,728 4,815 Working cap ital ad justments Change in inventories (19,525) 15 (23,919) (4,994) Change in trade and other receivables and prepayments (16,330) 478 (2,368) 3,006 Change in trade and other payables and contract liabilities 9,720 (870) 11,031 2,694 Interest received 162 182 425 209 Interest paid (276) (754) (575) (1,253) Income tax received/paid, net (1,448) (104) (1,448) (104) Net cash flows from op erating activities (32,083) (18,643) (36,876) (44,317) Investing activities Purchase of tangible assets (698) (248) (885) (555) Investments in intangible assets (2,505) (2,232) (3,318) (5,671) Investments in leasehold deposits (49) (56) (49) (56) Net cash used in investing activities (3,252) (2,536) (4,252) (6,282) F ree cash flow (35,335) (21,179) (41,128) (50,599) F inancing activities Capital increase 459 129,943 740 130,243 Transaction costs on issue of shares - (4,874) - (4,874) Payment of financial lease liabilities (803) (678) (1,604) (1,587) Proceeds from borrowings - (1,144) - - Repayment of borrowings (498) (2,185) (22,634) (2,185) Net cash flows from financing activities (842) 121,062 (23,498) 121,597 Net change in cash and cash eq uivalents (36,177) 99,883 (64,626) 70,998 Net foreign exchange difference (205) (1,070) (173) (1,928) Cash and cash equivalents at the beginning of the period 99,053 34,598 127,470 64,341 Cash and cash eq uivalents at the end of the p eriod 62,671 133,411 62,671 133,411 2nd q uarter H1
Page 9
Napatech HALF-YEAR REPORT 2026 page 9 of 17 BALANCE SHEET A SSETS 30 June 31 Dec. 30 June DKK'000 Note 2026 2025 2025 Development projects, completed 4,747 6,910 10,516 Development projects, in progress 11,822 9,226 9,940 Patents 562 691 855 Intangib le assets 5 17,131 16,827 21,311 Plant and equipment 2,467 3,401 4,005 Right-of-use assets 4,610 6,180 7,840 Leasehold improvements 883 404 487 Tangib le assets 6 7,960 9,985 12,332 Leasehold deposits 1,685 1,636 1,643 Other non- current assets 1,685 1,636 1,643 Non- current assets 26,776 28,448 35,286 Inventories 7 80,597 56,678 74,870 Trade receivables 40,064 37,733 18,051 Prepayments 4,705 4,446 4,525 Other receivables 12,638 12,350 19,814 Income tax receivable 5,563 4,830 6,253 Cash and cash equivalents 62,671 127,470 133,411 Current assets 206,238 243,507 256,924 Total assets 233,014 271,955 292,210
Page 10
Napatech HALF-YEAR REPORT 2026 page 10 of 17 EQUITY A ND LIA BILITIES 30 June 31 Dec. 30 June DKK'000 Note 2026 2025 2025 Share capital 8 27,611 27,535 27,513 Share premium 608,051 606,871 606,169 Treasury shares 9 (619) (619) (619) Foreign currency translation reserve (863) (1,387) (1,282) Share-based payment reserve 22,442 25,120 23,468 Retained earnings (477,545) (452,827) (438,619) Eq uity 179,077 204,693 216,630 Interest-bearing loans and borrowings 3,666 4,678 5,929 Other non-current financial liabilities 4,330 4,652 4,624 Non-current lease liabilities 1,713 3,349 5,000 Non-current contract liabilities 1,969 1,344 2,058 Non- current liab ilities 11,678 14,023 17,611 Interest-bearing loans and borrowings 2,074 23,374 34,706 Current lease liabilities 3,244 3,211 3,214 Trade payables 19,287 8,109 5,247 Other payables 13,039 12,712 11,438 Contract liabilities 4,615 5,833 3,364 Current liab ilities 42,259 53,239 57,969 Total liab ilities 53,937 67,262 75,580 Total eq uity and liab ilities 233,014 271,955 292,210
Page 11
Napatech HALF-YEAR REPORT 2026 page 11 of 17 STATEMENT OF CHANGES IN EQUITY DKK'000 Share capital Share premium Treasury shares Foreign currency translation reserve Share based payment reserve Retained earnings Total equity 2026 Equity at January 1 27,535 606,871 (619) (1,387) 25,120 (452,827) 204,693 Result for the period - - - - - (31,606) (31,606) Total other comprehensive income - - - 524 - - 524 Total comprehensive income for the period - - - 524 - (31,606) (31,082) Transactions with shareholders Issue of shares 76 664 - - - - 740 Reversal, exercised and lapsed options - 516 - - (7,406) 6,888 (2) Share-based payments - - - - 4,728 - 4,728 Equity at June 30 27,611 608,051 (619) (863) 22,442 (477,545) 179,077 H1 2025 Equity at January 1 24,999 483,062 (619) 553 18,946 (373,518) 153,423 Result for the period - - - - - (65,143) (65,143) Total other comprehensive income - - - (1,835) - - (1,835) Total comprehensive income for the period - - - (1,835) - (65,143) (66,978) Transactions with shareholders Issue of shares 2,514 127,729 - - - - 130,243 Transaction costs - (4,874) - - - - (4,874) Reversal, exercised and lapsed options - 252 - - (293) 42 1 Share-based payments - - - - 4,815 - 4,815 Equity at June 30 27,513 606,169 (619) (1,282) 23,468 (438,619) 216,630 2025 Equity at January 1 24,999 483,062 (619) 553 18,946 (373,518) 153,423 Result for the period - - - - - (80,655) (80,655) Total other comprehensive income - - - (1,940) - - (1,940) Total comprehensive income for the period - - - (1,940) - (80,655) (82,595) Transactions with shareholders Issue of shares 2,536 128,188 - - - - 130,724 Transaction costs - (4,954) - - - - (4,954) Reversal, exercised and lapsed options - 575 - - (1,921) 1,346 - Share-based payments - - - - 8,095 - 8,095 Equity at December 31 27,535 606,871 (619) (1,387) 25,120 (452,827) 204,693
Page 12
Napatech HALF-YEAR REPORT 2026 page 12 of 17 NOTES TO THE FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES The interim condensed consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU, and additional Danish disclosure requirements for listed companies. All new or amended standards (IFRS) and interpretations (IFRIC) , as adopted by the EU and effective for the financial year beginning on January 1, 2026, have been adopted. The implementation of these new or amended standards and interpretations had no impact on the interim condensed consolidated financial statements. The accounting policies are consistent with those applied to the consolidated financial statements for 2025. The consolidated financial statements for 2025 contain a full description of accounting policies. The interim condensed consolidated financial statements The interim condensed consolidated financial statements comprise the parent company, Napatech A/S, and its subsidiar y. The subsidiary is fully consolidated from the date of acquisition and/or incorporation, the date on which the parent company obtains control, until such control ceases. The subsidiary's financial statements are prepared for the same reporting period as the parent company's financial statements, using consistent accounting policies. The consolidated financial statements are prepared by consolidating the financial statements of the parent company and the subsidiary, eliminating all intragroup balances, transactions, unrealized gains and losses, and dividends. The interim condensed consolidated financial statements are prepared on a historical cost basis. The interim condensed consolidated financial statements are presented in thousand Danish kroner (DKK'000). 2. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES, AND ASSUMPTIONS The preparation of the interim condensed consolidated financial statements requires the Management to make judgments, estimates, and assumptions that affect the reported revenues, expenses, assets, and liabilities. The accounting judgments, estimates, and assumptions that Management makes are the same for these interim condensed consolidated financial statements as for the consolidated financial statements for 2025. 3. OPERATING SEGMENTS Business segment reporting has changed in H1 2026 due to enhanced focus from Management on the AI infrastructure part of the business diverting this part from the original Core Infrastructure business of Napatech. Previously the business segments consisted of the two segments SmartNIC products and Engineering services. The new business segment reporting consists of the two segments Core infrastructure and AI infrastructure. The segments are further explained in connection with the table below. Each segment includes revenue related to SmartNIC products, engineering services and other services. According to IFRS 15, revenue from engineering services is recognized in the income statement based on the stage of completion (over time), whereas revenue from SmartNIC products is recognized in the income statement at a point in time . Revenue from engineering services is no longer considered a separate business segment due to change in management focus. Comparative figures for the segment information have been adjusted according to the new segment reporting. The Group monitors the segments' performance at the level of gross profit. All other income statement items, as well as assets and liabilities, are managed on a group basis and therefore not allocated to individual segments. The following tables present revenue and gross profit information about the Group's operating segments for H1 202 6 and H1 2025, respectively:
Page 13
Napatech HALF-YEAR REPORT 2026 page 13 of 17 3. OPERATING SEGMENTS (CONTINUED) Geographical segments DKK'000 AMERICAS ROW CONSOLI- DATED AMERICAS ROW CONSOLI- DATED Revenue Total revenue 46,982 37,693 84,675 38,982 16,438 55,420 - Sales of goods 46,109 37,063 83,172 36,213 16,135 52,348 - Sales of services 873 630 1,503 2,769 303 3,072 Cost of goods sold (17,312) (9,491) (26,803) (13,188) (4,335) (17,523) Segment gross profit 29,671 28,201 57,872 25,794 12,103 37,897 2026 H1 2025 H1 Explanation of abbreviations: AMERICAS = North & South America ROW = Rest of the World The geographical segmentation is based on the location of the end-user customers, where Napatech deliver the products to. In 2026, the method used for the geographic allocation has been refined to better reflect the location of the actual end users. This resulted in a reallocation of revenu e of DKK 4.2 million and a reallocation of cost of goods sold of DKK 0.7 million from AMERICAS to ROW for H1 2025. The comparative figures have been adjusted. In H1 2026, revenue from sales to customers located in Denmark amounted to 0% of total revenue (H1 2025: 0%). The Group has material revenue from customers located in the USA. In H1 2026, sales to customers in the USA accounted for 54% of total revenue (H1 2025: 66%). Business segments DKK'000 Core Infrastruc- ture AI Infrastruc- ture CONSOLI- DATED Core Infrastruc- ture AI Infrastruc- ture CONSOLI- DATED Revenue Total revenue 82,726 1,949 84,675 52,695 2,725 55,420 Cost of goods sold (24,852) (1,951) (26,803) (17,175) (348) (17,523) Segment gross profit 57,874 (2) 57,872 35,519 2,378 37,897 2026 H1 2025 H1 The AI infrastructure consists of a layer of data center architecture built around production AI workloads. This includes inference pipeline acceleration for applications such as RAG and Mixture -of-Experts, scale -up and scale -out networking, checkpoint acceleration, storage acceleration, and multi-tenant security. Please note, that the H1 2026 revenue and gross profit was driven by early customer qualification orders coming at a low margin, whereas H1 2025 mainly consisted of engineering services. The Core infrastructure segment consists of the foundational data center and network architecture that supports mission-critical enterprise, service provider, and financial workloads. This includes cybersecurity and network security, packet capture and monitoring, deep packet inspection, telecommunications infrastructure, financial services networking, virtualized networking, storage and data pipeline acceleration, and secure, deterministic data movement at scale. Each segment includes both SmartNIC, engineering services and other services.
Page 14
Napatech HALF-YEAR REPORT 2026 page 14 of 17 4. EARNINGS PER SHARE DKK'000 2026 2025 (31,606) (65,143) Thousands 2026 2025 Weighted average number of shares for basic earnings per share 110,258 101,536 Effect of dilution: Share options - - Weighted average number of shares adjusted for the effect of dilution 110,258 101,536 Number of share options w ith potential effect of dilution: 2,644 2,987 H1 Net profit attributable to equity holders of the parent company for basic earnings and the effect of dilution H1 According to IAS 33, the effect of dilution from share options is not allowed to decrease the loss of earnings per share. 5. INTANGIBLE ASSETS DKK'000 Development projects, completed Development projects, in progress Patents Total Cost at 1 January 2026 205,771 9,226 5,728 220,725 Additions in the period - 3,318 - 3,318 Cost at 30 June 2026 206,493 11,822 5,728 224,043 Accumulated amortisation at 1 January 2026 198,861 - 5,037 203,898 Amortisation for the period 2,885 - 129 3,014 Accumulated amortisation and impairment 30 June 2026 201,746 - 5,166 206,912 Carrying amount at 30 June 2026 4,747 11,822 562 17,131 The annual impairment test for the intangible assets will be performed on December 31, 2026. As of June 30, 2026, the Management has assessed that there were no indications of impairment concerning the Group's intangible assets in the reporting period.
Page 15
Napatech HALF-YEAR REPORT 2026 page 15 of 17 6. TANGIBLE ASSETS DKK'000 Plant and equipment Leasehold improve- ments Total Cost at 1 January 2026 20,232 2,121 22,353 Additions in the period 296 589 885 Presentation currency adjustment 20 - 20 Cost at 30 June 2026 20,548 2,710 23,258 Accumulated depreciation and impairment at 1 January 2026 16,831 1,717 18,548 Depreciation for the period 1,231 110 1,341 Presentation currency adjustment 19 - 19 Accumulated amortisation and impairment 30 June 2026 18,081 1,827 19,908 Carrying amount at 30 June 2026 2,467 883 3,350 7. INVENTORIES 30 June 30 June DKK'000 2026 2025 Consumables and components 35,954 18,771 Finished goods and goods for resale 44,943 56,099 Total inventories at 30 June 80,897 74,870 Carrying value of inventories recognised at fair value - - The cost of goods sold also includes movements in inventory write-down. Movements in inventory write-down are as follows: DKK'000 2026 2025 Inventory w rite-dow n at 1 January 1,163 3,090 Inventory w rite-dow n for the year 10 - Reversal of inventory w irte-dow n - (243) Inventory write-down at 30 June 1,173 2,847 8. ISSUED SHARE CAPITAL AND RESERVES Authorised shares 2026 2025 Thousands Thousands Ordinary shares of DKK 0.25 each at 1 January 110,139 99,997 Increase in ordinary shares DKK 0.25 each 304 10,057 Ordiniary shares of DKK 0.25 each at 30 June 110,443 110,054 9. TREASURY SHARES Treasury shares have been acquired to settle share options in the Group's share option program.
Page 16
Napatech HALF-YEAR REPORT 2026 page 16 of 17 10. COMMITMENTS AND CONTINGENCIES Collaterals The Group has issued a floating charge of DKK 40 million secured on receivables, inventories, patents, and plant and equipment as collateral for loans. Contingent liabilities The Group has engaged in a contract providing engineering services with an e arn-back: clause to provide a one -time rebate of part of the consideration paid by the customer for engineering services once the Group sells a specific number of cards to the customer. The potential rebate amounts to DKK 2.3 million. It is uncertain if the sales will exceed the threshold for the earn-back.
Page 17
Napatech HALF-YEAR REPORT 2026 page 17 of 17 Napatech A/S Tobaksvejen 23A, 1 DK-2860 Søborg Denmark CVR no. 10109124 Phone: +45 4596 1500 www.napatech.com