Napatech

The Q&A session will now commence. If you would like to ask a question via the telephone line, please press star 1. If you'd like to withdraw your question, please press star 2. If you'll join the call via the webcast, you can submit a written question. We do have a question on the telephone line here from Oystein Lodgaard at ABG. Please go ahead.

Thank you. Good morning. Just starting off with the legacy business. There's one big customer that aren't contributing much to this quarter. Can you say, is there any reason to believe that this customer shouldn't come back to its previous volume contribution in the future?

That's correct. uh as you can see from our historical data then we had many quarters in the last two years where this where one of our biggest clients were around 50 percent of our revenue so obviously this has a very big impact on our first half year um this is mainly due to uh it's due to two things one is that they have a safety stock they're drawing from And this results basically in very few orders to Napatech. Second thing is they also have experienced what the market has experienced over the last half year, very significant, less spend in 24 compared to previous years. So these two things are the reasons. We certainly know that this safety stock will go empty and that will help orders from this client. In addition, we also believe that the market will come back. So yes, we expect this client to come back to normal order situation again.

Great, thanks. And congrats on the new design win. Could you just give some flavor on how we should think of the ramp up of that design win in 2025 and beyond? You indicated five to 10,000 units. Is that the likely scenario for 26, 27 or how should we think about the potential?

Yeah, so this client, their offering is mainly a software offering for for aggregated data security. And they're using our 200 gig IPU product standard. So basically what they've done is they've ported their software to our 200 gig product standard. So obviously, it all depends on how many projects they win. We have some insight to that, but it's kind of outside our control. So if we say that they will do 5,000 units next year, of course, there's a lot uncertain to that. It can be more, it can be less. It all depends on how many projects they win, but they have good traction in the market, so we are hopeful that they will be in that range.

Thank you. And just an update on the previous design win that you announced, is there anything to share regarding that, regarding timeline or anything else?

The project is going really well. We have delivered the first hardware on time. Some of the features we had delivered has actually been ahead of time, so the project is going really well. It's a development project done in connection with Intel Altera on 400 gig, our next product. So if you look at the dashboard for the schedule, it's all green.

Great. And you shared some of your further pipeline, but how should we think about potential for further design wins beyond the 4-6 in 2024? Would you like to share anything of that? I guess you have more in the pipeline, like you indicated.

Yes, so we try in this presentation to give you a little bit more insight on what kind of different projects we are working on. Our entire pipeline is coming from Intel Altera. Altera is the growth unit in at Intel, which was carved out last year. They're doing really well. They came in above expectation in the last quarter, and we benefited from that. So we clearly Our entire pipeline on IPUs is coming from Altera. And it's clearly the number of leads has clearly exceeded our expectations. So we have really high activity level with Altera on their projects where we are the sole supplier of IPUs. And we basically just try to give you a flavor of what kind of different projects we're working on this is just a snapchat of that some of them will come in some might not come in but we are hopeful that we definitely will be in the range of four to six design wins um so all in all it's looking good great thank you that was all my questions thank you i'll now hand over to lars for any webcast questions There is a question here from Jakob Gule, Engo Invest. Can you elaborate on your cash position and do you expect any additional capital raise going forward? So, we certainly have no plans of new funding rounds. Even with very conservative revenue projection for 2025, we have full funding in the next 18 months. And obviously, we hope that we will have good revenue streams already next year from the new products. So we consider ourselves fully funded.

I think this ends

questions unless there are more questions from the audience okay that concludes today's call for the first half of 2024 on behalf of Napatech we thank you for your interest in our business and hope you share our excitement about our future Please know that there are several ways to stay informed about what's happening with Napatech in between our quarterly financial reporting, including our social media venues, monthly newsletter, and other forums. Thank you for attending today's call.