Napatech A/S

Q1 2026 revenue was $5.7 million, up 69% year over year. Gross margin was 70%, in line with last year. EBITDA was negative DKK 18 million, an improvement of DKK 11 million versus Q1 2025, and free cash flow was negative DKK 5.8 million. Staff costs and other external costs were DKK 44.5 million, down 9% year over year, capitalized development costs were DKK 810,000 versus DKK 3.1 million a year ago, net working capital was DKK 73 million, and available cash was more than DKK 120 million. Full-year 2026 guidance was unchanged: units sold of 8,700-10,700, revenue of $32 million-$38 million, gross margin of 60%-70%, staff and external costs of DKK 170 million-DKK 180 million, and capitalized development costs of DKK 5 million-DKK 8 million.

Kartik Srinivasan said the quarter showed strengthening financial performance, early signs of recovery in core infrastructure, and accelerating momentum in the design-win pipeline across both core and AI infrastructure. He framed AI as a structural shift where networking and memory become bottlenecks, and said Napatech’s deterministic programmable architecture is well aligned with that change. His tone was upbeat but measured, stressing that the company is focused on execution and converting pipeline into revenue over time.

Klaus Skovrup highlighted the Q1 revenue of $5.7 million, 70% gross margin, and DKK 18 million negative EBITDA, while noting a DKK 11 million year-over-year EBITDA improvement. He said operating costs were DKK 44.5 million, down 9% year over year, free cash flow was negative DKK 5.8 million, and net working capital fell to DKK 73 million from Q4 2025. He also emphasized liquidity, saying the company still has more than DKK 120 million in available cash, and reiterated unchanged 2026 guidance for revenue, margin, volume, and operating expenses.

Analysts focused on timing and revenue conversion for the AI infrastructure customer, the Tier 1 server OEM, and d-Matrix, plus whether added inventory is enough for a ramp. Management said the AI and OEM opportunities are progressing on plan, with technical and commercial alignment in place, but timing of conversion into meaningful revenue remains the key variable. On the financial design win, Kartik said the first $1.5 million should arrive within the next couple of months and is already baked into 2026 guidance; he also said AI revenue is expected mainly in the second half and still represents about 20% of 2026 revenue.