Interim report
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NAPATECH 3RD QUARTER 2026 INTERIM MANAGEMENT STATEMENT
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Napatech 3rd Quarter 2026 page 2 of 10 MANAGEMENT'S REPORT The third quarter of 2026 marked an important milestone in Napatech's transformation, with our first AI Infrastructure production shipments complementing continued Core Infrastructure growth. This represents tangible progress in translating our AI strategy into commercial results. We are experiencing momentum within AI Infrastructure engagements building a pipeline for the future. Q3 revenue reached $10.3M (DKK 66.9M), up 64% in USD and 67% in DKK year -on-year. A growth of 39% quarter- over-quarter and the highest third quarter revenue in Napatech history. Nine-month revenue increased to $23.4M (DKK 151.6M), up 62% in USD and 59% in DKK. Year-to-date gross margin was 62.6%, compared with 69.3% in 2025, reflecting a growing contribution from AI Infrastructure. Q3 gross margin was 55.4%. This was due to a one-time temporary lag in repricing of the initial ramp order within AI Infrastructure. A revised pricing structure takes effect in Q4 improving our gross margin considerably, supporting our unchanged full-year revenue and gross-margin guidance. Core Infrastructure remains our profitable foundation, generating $20.9M in the first nine-month revenue. We secured 13 design wins across enterprise, telecommunications and cybersecurity. In AI Infrastructure, we commenced shipments against the previously announced 1,000 -unit production order from our first customer in this segment, bringing year-to-date revenue to $2.6M. This marks a significant step in our commercialization journey. As AI inference increasingly spans CPUs, GPUs and specialized accelerators, efficient data movement is becoming critical to system performance, utilization and infrastructure economics. Napatech's adaptive AI NICs combine programmable hardware and software to optimize networking, data movement and infrastructure offloads across heterogeneous AI systems. Our AI opportunities continue to expand through customer engagements and technical qualifications. Converting these into design wins remains a priority. We are strengthening supply planning to support anticipated ramps . Despite volatile component lead times and pricing, we do not currently see supply availability as a constraint to our revenue outlook due to long-term planning. Further, we are adjusting customer pricing where appropriate. Operating performance improved, with Q3 EBITDA close to break-even versus negative DKK 6.1M last year. Year-to- date EBITDA improved to negative DKK 24.8M from negative DKK 54.8M. Staff costs and other external costs totaled DKK 124.2M, compared with DKK 126.7M, reflecting continued cost discipline. Free cash flow was negative DKK 16.9M in Q3 due to increased working capital and negative DKK 58.0M year-to-date, compared with negative DKK 52.3M in the first nine months of 2025. Net working capital reached DKK 116.1M, reflecting backloaded invoicing and higher inventories. Quarter-end cash was DKK 45.5M, with total available liquidity of DKK 67.1M, including undrawn committed facilities. Our 2026 revenue guidance remains unchanged at DKK 200–240M, with gross margin guidance of 60–70%. With a strong Core business and AI Infrastructure entering commercial production, Napatech is positioned for its next phase of growth. Our focus remains on scaling customer programs, converting opportunities into revenue, and delivering sustainable, profitable growth. Thank you to our employees, customers, partners and shareholders for your continued support. Best regards, Kartik Srinivasan Chief Executive Officer
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Napatech 3rd Quarter 2026 page 3 of 10 Highlights YTD: • Revenue YTD Q3 2026 in USD amounted to 23.4M, an increase of 62% compared to 2025. In DKK, revenue amounted to 151.6M, an increase of 59% compared to 2025. • The gross margin YTD Q3 2026 was 62.6%, a decline of 6.7%-points compared to 2025. • Staff costs and Other external costs YTD Q3 2026 amounted to DKK 124.2M compared to DKK 126.7M in 2025. • EBITDAC1 YTD Q3 2026 amounted to negative DKK 29.3M compared to negative DKK 60.5M in 2025. • EBITDA YTD Q3 2026 amounted to negative DKK 24.8M compared to negative DKK 54.8M in 2025. • Depreciation, amortization, and impairment YTD Q3 2026 were DKK 8.4M compared to DKK 17.3M in 2025. • Net Cash flow from operating activities YTD Q3 2026 was negative DKK 52.2M compared to negative DKK 44.3M in 2025. • Net working capital end of Q3 2026 amounted to DKK 116.1M compared to DKK 91.2M end of Q3 2025 and DKK 83.2M end of 2025. • Net cash used in investing activities YTD Q3 2026 amounted to DKK 5.8M compared to DKK 8.0M YTD Q3 2025. • Cash and cash equivalents at the end of Q3 2026 amounted to DKK 45.5M compared to DKK 117.7M at the end of Q3 2025. • Cash available at the end of Q3 2026 amounted to DKK 67.1M compared to DKK 118.9M at the end of Q3 2025 . Highlights Q3: • Revenue in USD amounted to 10.3M in Q3 2026, an increase of 64% compared to Q3 2025. In DKK, revenue amounted to 66.9M, an increase of 67% compared to Q3 2025. • The gross margin in Q3 2026 was 55%, compared to 70% in Q3 2025. • Staff costs and Other external costs in Q3 2026 amounted to DKK 38.6M compared to DKK 35.1M in Q3 2025. • EBITDAC in Q3 2026 amounted to negative DKK 1.5M compared to negative DKK 6.9M in Q3 2025. • EBITDA in Q3 2026 amounted to negative DKK 0.0M compared to negative DKK 6.1M in Q3 2025. • Depreciation, amortization, and impairment for Q3 2026 were DKK 2.5M compared to DKK 5.0M in Q3 2025. • Net Cash flow from operating activities in Q3 2026 was negative DKK 15.3M compared to negative DKK 0.0M in Q3 2025. • Net cash used in investing activities in Q3 2026 amounted to DKK 1.6M compared to DKK 1.7M in Q3 2025. Key figures2: Q3 2026 Q3 2025 YTD 2026 YTD 2025 Revenue USD M 10.3 6.3 23.4 14.5 Growth YoY USD M 64% 25% 62% 26% Revenue DKK M 66.9 40.1 151.6 95.6 Growth YoY DKK M 67% 18% 59% 21% Gross Margin 55% 70% 63% 69% EBITDAC DKK M -1.5 -6.9 -29.3 -60.5 EBITDA DKK M 0.0 -6.1 -24.8 -54.8 Net Cash Flow from Operating Activities DKK M -15.3 0.0 -52.2 -44.3 Net Working Capital, end of period DKK M 116.1 91.2 116.1 91.2 Cash and cash equivalents, end of period DKK M 45.5 117.7 45.5 117.7 Unused credit facilities, end of period DKK M 21.6 1.2 21.6 1.2 Cash available, end of period DKK M 67.1 118.9 67.1 118.9 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.
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Napatech 3rd Quarter 2026 page 4 of 10 Revenue and Gross Margin Q3 Napatech reports revenue of DKK 66.9M in Q3 2026 compared to DKK 40.1M in the same period in 2025, equivalent to an increase of 67%. In USD, revenue grew 64% compared to Q3 2025. The gross margin in Q3 2026 was 55% compared to 70% in Q3 2025. YTD Q3 Napatech reports revenue of DKK 151.6M in the first three quarters of 2026 compared to DKK 95.6M in the same period in 2025, equivalent to an increase of 59%. In USD, revenue was up 62% compared to 2025. The gross margin YTD Q3 2026 was 62.6% compared to 69.3% YTD Q3 2025. Costs Q3 Staff costs and Other external costs in Q3 2026 amounted to DKK 38.6M, compared to DKK 35.1M in Q3 2025. Operating expenses after the transfer of staff costs to capitalized development costs in Q3 2026 amounted to DKK 37.1M, compared to DKK 34.4M in Q3 2025. YTD Q3 Staff costs and Other external costs YTD Q3 2026 amounted to DKK 124.2M, compared to DKK 126.7M YTD Q3 2025. Operating expenses after the transfer of staff costs to capitalized development costs YTD Q3 2026 amounted to DKK 119.7M, compared to DKK 121.0M YTD Q3 2025. EBITDAC and EBITDA Q3 Earnings before Interest, Tax, Depreciation, Amortization, and Capitalization of development cost (EBITDAC) amounted to negative DKK 1.5M in Q3 2026 compared to negative DKK 6.9M in Q3 2025. EBITDA in Q3 2026 was negative DKK 0.0M compared to negative DKK 6.1M in Q3 2025. YTD Q3 EBITDAC amounted to negative DKK 29.3M YTD Q3 2026 compared to negative DKK 60.5M YTD Q3 2025. EBITDA YTD Q3 2026 was negative DKK 24.8M compared to negative DKK 54.8M YTD Q3 2025. Depreciation, amortization, and impairment Q3 Depreciation, amortization, and impairment in Q3 2026 were DKK 2.5M compared to DKK 5.0M in Q3 2025. YTD Q3 Depreciation, amortization, and impairment YTD Q3 2026 were DKK 8.4M compared to DKK 17.3M YTD Q3 2025. Financial Items Q3 Financial items for Q3 2026 were positive DKK 0.1M compared to negative DKK 0.1M in Q3 2025. YTD Q3 Financial items YTD Q3 2026 were negative DKK 0.1M compared to negative DKK 4.1M YTD Q3 2025. Taxes Q3 Taxes for Q3 2026 amounted to a cost of DKK 0.2M compared to an income of DKK 0.0M in Q3 2025. YTD Q3 Taxes YTD Q3 2026 amounted to a cost of DKK 0.9M compared to a cost of DKK 0.1M YTD Q3 2025. Investments Q3 The total net cash used in investing activities in Q3 2026 was DKK 1.6M, of which DKK 1.4M was invested in new product development. In Q3 2025, the total net cash used in investing activities was DKK 1.7M, of which DKK 1.1M was invested in new product development. YTD Q3 The total net cash used in investing activities YTD Q3 2026 was DKK 5.8M, of which DKK 4.7M was invested in new product development. YTD Q3 2025, the total net cash used in investing activities was DKK 8.0M, of which DKK 6.8M was invested in new product development. Cash Flow Q3 Net cash flow from operating activities in Q3 2026 was negative DKK 15.3M compared to negative DKK 0.0M in Q3 2025 . Q3 2026 was impacted by a negative development in working capital primarily due to invoicing of sales being backloaded. Free cash flow in the quarter amounted to negative DKK 16.9M compared to negative DKK 1.7M in Q3 2025. Net cash from financing activities in Q3 2026 was negative DKK 0.7M, compared to a negative DKK 13.9M in Q3 2025. YTD Q3 Net cash flow from operating activities YTD Q3 2026 was negative DKK 52.2M compared to negative DKK 44.3M YTD Q3 2025. Free cash flow YTD Q3 2026 amounted to negative DKK 58.0M compared to negative DKK 52.3M YTD Q3 2025. Net cash from financing activities YTD Q3 2026 was negative DKK 24.2M, compared to positive DKK 107.7M YTD Q3 2025. Cash and cash equivalents end of Q3 2026 were DKK 45.5M compared to DKK 117.7M at the end of Q3 2025.
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Napatech 3rd Quarter 2026 page 5 of 10 Outlook for 2026 2026 guidance remains unchanged: Target in DKK million Guidance Revenue 200-240 Units sold 7,700-9,700 Gross margin 60-70% Staff costs & Other external costs 170-180 Staff costs transferred to capitalized development costs 5-8 With performance in the middle of the guided ranges, EBITDA would be negative at around DKK 25M. 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 what ha s been expressed or implied in such statements.
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Napatech 3rd Quarter 2026 page 6 of 10 INCOME STATEMENT For the period ended September 30, 2026 D K K '0 0 0 2026 2025 2026 2025 Revenue 66,906 40,133 151,581 95,553 Cost of goods sold (29,868) (11,841) (56,671) (29,364) Gross profit 37,038 28,292 94,910 66,189 Staff costs (30,044) (25,495) (94,744) (89,997) Other external costs (8,522) (9,649) (29,449) (36,660) EBITDAC (1,528) (6,852) (29,283) (60,468) Transferred to capitalized development costs 1,494 755 4,499 5,681 EBITDA (34) (6,097) (24,784) (54,787) Depreciation, amortization and impairment (2,475) (5,018) (8,401) (17,345) Operating result (EBIT) (2,509) (11,115) (33,185) (72,132) Finance income 282 439 707 648 Finance costs (185) (545) (819) (4,786) Result before tax (2,412) (11,221) (33,297) (76,270) Income tax (169) 1 (890) (93) Result for the period (2,581) (11,220) (34,187) (76,363) YTD Sep .3 rd q u art er
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Napatech 3rd Quarter 2026 page 7 of 10 CASH FLOW STATEMENT For the period ended September 30, 2026 D K K '0 0 0 2026 2025 2026 2025 Operating activities Income/Loss before tax (2,412) (11,221) (33,297) (76,270) Adjustments to reconcile profit before tax to net cash flows Finance income (282) (439) (707) (648) Finance costs 185 545 819 4,786 Depreciation, amortisation and impairment 2,475 5,018 8,401 17,345 Share-based payment expense 2,140 1,675 6,868 6,490 Working capital adjustments Change in inventories (4,402) 9,769 (28,321) 4,775 Change in trade and other receivables, contract assets and prepayments (17,594) (3,538) (19,962) (532) Change in trade and other payables and contract liabilities 4,802 (2,416) 15,833 278 Interest received 155 439 580 648 Interest paid (244) (345) (819) (1,598) Income tax received/paid, net (162) 511 (1,610) 407 Net cash flows from operating activities (15,339) (2) (52,215) (44,319) Investing activities Purchase of tangible assets (138) (579) (1,023) (1,134) Investments in intangible assets (1,421) (1,139) (4,739) (6,810) Investments in leasehold deposits - - (49) (56) Net cash used in investing activities (1,559) (1,718) (5,811) (8,000) Free cash flow (16,898) (1,720) (58,026) (52,319) Financing activities Capital increase 1,184 282 1,924 130,525 Transaction costs on issue of shares - (80) - (4,954) Increase (decrease) through treasury share transactions (416) - (416) - Payment of financial lease liabilities (799) (800) (2,403) (2,387) Repayment of borrowings (681) (13,255) (23,315) (15,440) Net cash flows from financing activities (712) (13,853) (24,210) 107,744 Net change in cash and cash equivalents (17,610) (15,573) (82,236) 55,425 Net foreign exchange difference 450 (183) 277 (2,111) Cash and cash equivalents at the beginning of the period 62,671 133,411 127,470 64,341 Cash and cash equivalents at the end of the period 45,511 117,655 45,511 117,655 3 rd q u art er YTD Sep .
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Napatech 3rd Quarter 2026 page 8 of 10 BALANCE SHEET ASSETS 3 0 Sep . 3 1 D ec . 3 0 Sep . D K K '0 0 0 2026 2025 2025 Development projects, completed 13,347 6,910 9,650 Development projects, in progress 3,671 9,226 8,463 Patents 499 691 766 Intangible assets 17,517 16,827 18,879 Plant and equipment 1,867 3,401 3,988 Right-of-use assets 3,843 6,180 7,204 Leasehold improvements 948 404 445 Tangible assets 6,658 9,985 11,637 Leasehold deposits 1,685 1,636 1,643 Other non-current assets 1,685 1,636 1,643 Non-current assets 25,860 28,448 32,159 Inventories 84,999 56,678 65,101 Trade receivables 57,641 37,733 22,007 Contract assets 1,185 - - Prepayments 3,682 4,446 3,435 Other receivables 12,492 12,350 20,401 Income tax receivable 5,563 4,830 5,757 Cash and cash equivalents 45,511 127,470 117,655 Current assets 211,073 243,507 234,356 Total assets 236,933 271,955 266,515
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Napatech 3rd Quarter 2026 page 9 of 10 EQUI TY AND L I ABI L I TI ES 3 0 Sep . 3 1 D ec . 3 0 Sep . D K K '0 0 0 2026 2025 2025 Share capital 27,733 27,535 27,526 Share premium 609,984 606,871 606,555 Treasury shares (1,035) (619) (619) Foreign currency translation reserve (784) (1,387) (1,344) Share-based payment reserve 22,994 25,120 24,945 Retained earnings (479,409) (452,827) (449,839) Equity 179,483 204,693 207,224 Interest-bearing loans and borrowings 3,143 4,678 5,459 Other non-current financial liabilities 4,172 4,652 4,624 Non-current lease liabilities 882 3,349 4,307 Non-current contract liabilities 2,058 1,344 2,243 Non-current liabilities 10,255 14,023 16,633 Interest-bearing loans and borrowings 2,074 23,374 21,921 Current lease liabilities 3,276 3,211 3,281 Trade payables 20,241 8,109 3,888 Other payables 17,276 12,712 10,279 Contract liabilities 4,328 5,833 3,289 Current liabilities 47,195 53,239 42,658 Total liabilities 57,450 67,262 59,291 Total equity and liabilities 236,933 271,955 266,515
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Napatech 3rd Quarter 2026 page 10 of 10 Napatech A/S Tobaksvejen 23A, 1 DK-2860 Søborg Denmark CVR no. 10109124 Phone: +45 4596 1500 www.napatech.com