(Copenhagen ,2 May 2024 )Napatech A/S ("Napatech ", OSE: NAPA) today provided an update on their business, including: an increase to design win pipeline guidance, reaffirming CY 2024 financial guidance, and preliminary results for Q1 2024. OnApril 18 Napatech announced a collaboration with Altera, an Intel company, on the detailed specifications of theHot Springs Canyon architecture and initial product designs that were developed in partnership with a tier-1, global server OEM that continues to lead in enterprise and cloud data center deployments. As a result of these partnerships, the full potential is at the largest end of the spectrum for transformational growth thatNapatech envisioned. At peak annual volumes, this single opportunity alone has the potential to transformNapatech's long-term revenue and profits. Consequently, we are maintaining our target of 4-6 design wins, while increasing our guidance from 30,000-40,000 units to 50,000-60,000 units in peak annual production years. The collaboration develops new programmable NIC hardware and software solutions based on an architecture that promises to enable an innovative approach to powering modern public cloud, private cloud, edge, and enterprise data centers built for the AI era. The new solution is purpose-built for the highest growth and largest volume applications, services and use cases for Programmable NICs. These include modern cloud and edge computing applications and services, artificial intelligence infrastructure, disaggregated storage, big data analytics, cybersecurity, 5G mobile infrastructure, and microservices. The product is packed with the latest technology from the semiconductor vendor and designed with optimizations to meet the exact requirements of the server manufacturer. The collaboration is anchored by agreements, associated statements of work that define the product specifications, and professional services fees from both companies toNapatech . The collaboration includes these significant contributions, reflecting the shared commitment required to expedite the underlying engineering to deliver products in the second half of 2024. Additionally,Napatech's financial outlook for 2024 remains unchanged: - Revenue in the range ofDKK 170 - 180 million - Gross margin 69-71% - Staff expenses and other external costs in the range ofDKK 145-155 million - Staff costs transferred to capitalized development costsDKK 10-15 million With performance in the middle of the guided ranges, EBITDA would be negativeDKK 15.0 million in 2024. Preliminary Q1 2024 financial results included revenues ofDKK 21.5 million in the 37.1 million in the first quarter of 2023) and an EBITDA ofDKK -24.3 million (-12.8). The free cash flow in the first quarter of 2024 ended atDKK -6.4 million (17.2). At the end of the first quarter,Napatech had cash and cash equivalents ofDKK 27.5 million (12.3). 1Q 2024 was expected to be a slower than normal start to the year primarily because one of our largest customers' continuing inventory correction to deplete a covid-driven safety stock that is expected to be completed through h1H 2024. In addition, March order flow was unexpectedly slow, driven by one large order deferred to Q2 2024. The full Q1 reporting will take place onMay 16, 2024 . For additional information, please contact:Lars Boilesen , CEO Phone: +45 45961500 E-mail: larsb@napatech.com OrHeine Thorsgaard , CFO Phone: +45 4596 1500 E-mail: htg@napatech.com This information is inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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