Napatech

Hello and welcome to the NAPA Tech Q4 2025 IMS Conference Call. My name is Alex and I'll be coordinating today's call. If you'd like to ask a question at the end of the presentation, you may press star followed by one on your telephone keypad. I'll now hand it over to Klaus Skofrup, CFO, to begin. Please go ahead.

Good morning. I'm Klaus Skorup, CFO of Navitek. I'm pleased to welcome you all to the Navitek's presentation for the fourth quarter and full year of 2025. Joining me today is our CEO, Karthik Srinivasan. Our fourth quarter and financial year 2025 report was released earlier this morning on the Oslo Stock Exchange, and it's also available on the Investor Relations section of the Navitek website. For your information, a recording of this webcast will be available later today. There will be a question and answer session following the presentation. And during and after these prepared remarks, you may submit your questions via text on the webcast page, or we can take your questions on the phone. If you would like to ask a question, please follow the instructions on the slide. Please note that this presentation contains forward-looking statements that are subject to risks and uncertainties. Our actual results may differ from those discussed in forward-looking statements. For further information on risk factors, please see company announcement and the slides prepared for this presentation. With that, over to you, Karthik.

Thank you very much, Klaus, and good day, everyone. Here is the agenda for today's update. First, I'll briefly cover the leadership transition and how we've strengthened the executive team. Then I'll walk through the market opportunity and the customer segments we are focused on. Next, we'll review our product portfolio and how our solutions are aligned to those opportunities. And finally, Klaus will cover our financial performance and our outlook. As the new CEO of Napa Tech, I'm pleased to step into this role at a time when our core business is growing steadily and the market opportunity ahead of us is expanding meaningfully. particularly in AI infrastructure. Napa Tech has built a strong networking business grounded in deep technical expertise, and we are now extending that foundation into what we see as the next phase of infrastructure growth driven by AI workloads. I'd like to sincerely thank our former CEO, Lars Boileson, who has transitioned into the role of chairman of our board. His leadership during a critical phase of Napa Tech's transformation provided stability, focus, and strategic direction as the company evolved its market positioning and product strategy. I'm grateful to Lars and the board for their confidence in me to lead this next chapter, and I look forward to applying my experience to accelerate execution and customer impact. I'm also pleased to welcome Klaus Korup, our new chief financial officer. Klaus brings strong experience in finance and investor relations and will play a key role in strengthening our operational and financial discipline. Over the remainder of this presentation, we'll walk through how we are framing our target markets, the solution strategies we are executing against those opportunities, and how this focus is translating into tangible growth and momentum. We've made meaningful progress against the key objectives of our strategic plan, strengthening our position in the evolving market for programmable networking solutions. Over the past year, we've delivered measurable improvements in our existing business, while advancing the design wins and customer engagements that support our long-term growth ambitions. Execution has progressed according to plan. As we compare our position today to where we were a year ago, we are operating from a stronger foundation with improved visibility, clearer market focus, and better alignment between our product roadmap and customer demand. Importantly, this progress enhances our confidence in both the timing and the scale of our growth trajectory while continuing to reduce execution With that context, let me walk through the current state of the business and our outlook. Let me briefly highlight our 2025 financial performance and what it reflects about how we are running our business. Our results are increasingly the outcome of a structured operating model and disciplined execution across the company. In the fourth quarter, revenue grew to $7.9 million, up 48% year over year. as design wins and roadmap execution translated into expanding customer deployments. For the full year, revenue increased to $22.4 million, reflecting continued momentum across the business. At the same time, we maintained strong gross margins at 70% in Q4 and 69% for the full year, reinforcing the quality of our revenue mix and the growing contribution of higher value solutions and software. Importantly, we delivered this growth while actively managing costs. Operating expenses declined year over year in line with our execution plan as we focused resources on the highest impact programs and improved efficiency across the organization. This discipline is also evident in our cash performance. Networking capital improved from 98.6 million Danish kroner to 83.2 million kroner. Operating cash flow turned positive in the fourth quarter, And we exited the year with 127 million in cash and equivalents. Taken together, these results demonstrate a business that is executing its roadmap, scaling with financial rigor, and strengthening its operating foundation. We continue to optimize planning, execution, and capital allocation processes to further improve predictability and efficiency as we grow. Overall, the financial trajectory reflects not just growth, but controlled scalable growth. positioning us well for the next phase of expansion. The final section of today's presentation will include a detailed financial summary for 2025 by Klaus. Beyond the numbers, we are making great strides with our strategic accounts, prospects, and ecosystem partnerships. Our activities with the previously announced tier one OEM vendor and AI inferencing vendor D-Matrix continue to act as a cornerstone for our product and technology planning. This provides us high confidence and low risk investments to meet their exact requirements for solutions to applications and use cases that we aim to broadly replicate in the mass market. Throughout 2025, we extended our technology leadership. We extended our leadership by the launch of our new SmartNIC and DPU platforms aligned to emerging AI networking requirements powered by Altera and Intel that notably were specified by our tier one OEM. We continue to work hand in hand with Altera on evolving solution, product and technology roadmaps, and co-development, attacking the highest growth segments of AI, storage, networking, cybersecurity, fintech, and others. Many of you will have seen numerous industry and financial press and analyst reports about the launch of D-Matrix Jetstream AI networking interface card, aimed at new AI data centers in the cloud, edge, and enterprise. Throughout this period, our R&D teams consistently met committed milestones on time and to specification for demanding customer programs. We continue to build scalable growth across the business. We are pleased with the continuous strength, increasing revenue and opportunities from our core use cases while new infrastructure applications are gaining traction. We see increasing validation that our software and hardware investments align with the highest growth use cases and are becoming more repeatable and scalable across customer segments. Beyond our developments, we continue to build an ecosystem of partners to enhance both the breadth of our product offerings as well as the reach of our go-to-market motions across several use cases. We remain laser focused on design wins. We continue to build pipeline opportunities of transformational scale with new customers and use cases emerging regularly through both direct engagement and partner channels. In 2025, we secured 27 new designments, providing a solid foundation for future production revenue. And we continue to strengthen our ability to execute. We have strengthened the leadership team and operating discipline across the organization. We are embedding AI-enabled productivity tools across engineering, product, sales, and operations to accelerate time to solution, improve execution velocity, and drive greater efficiency at scale. This operating model is increasingly aligned around market focus, solution prioritization, revenue alignment, and discipline delivery, all designed to support consistent, scalable growth. As we look across the infrastructure landscape, we are seeing demand and requirements begin to clearly bifurcate. On one side, enterprise infrastructure applications such as security, storage, and performance networking continue to require deterministic performance, reliability, and efficiency. These environments value predictable behavior, long life cycles, and deeply embedded solutions, areas where NAPA Tech has built longstanding leadership. At the same time, a new wave of deployments driven by production AI is scaling at an entirely different pace. These environments demand not only high performance, but rapid time to solution, efficient data movement, and architectures that can be deployed and optimized quickly at scale. While both demand profiles require advanced performance, the economics, deployment velocity, and solution expectations are increasingly diverging. In response, we have deliberately reframed both our market focus and our solution strategy to align with these two distinct demand environments, ensuring we can scale efficiently in established applications while capturing the growth in emerging AI-driven deployments. On the next two slides, I'll walk through how we've structured these market segments and how our product portfolio is aligned to serve each opportunity effectively. Based on the demand bifurcation we're seeing, we've structured a market strategy around two distinct infrastructure segments. On the left is what we define as core infrastructure. This includes longstanding performance critical applications such as cybersecurity, network monitoring, capture and replay, deep packet inspection, telecom infrastructure, and financial services. These environments value deterministic performance, reliability, and efficiency, and this is where NAPA Tech has built its foundation. Today, our packet capture software and programmable NIC platforms are deeply embedded across the core infrastructure use cases, driving durable customer relationships and consistent recurring revenue. This segment represents meaningful expansion opportunity within our existing customer base as workload scale and performance requirements increase. From a market perspective, core infrastructure represents an approximately six and a half to 10 billion opportunity over the next five years, growing at a CAGR of roughly 12%. On the right is what we define as AI infrastructure, the fast emerging layer of the 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. These deployments are scaling rapidly and placing entirely new demands on performance, latency, and efficiency. As a result, this segment represents a significantly higher growth opportunity, expanding from roughly $6 billion today to approximately $20 billion by 2030, growing at a CAGR of over 35%. Together, these two segments provide Navatech with a balanced growth profile a durable core business today, and a high growth infrastructure opportunity driven by the expansion of AI into production environments. In parallel with how we structured our market focus, we've also deliberately structured our solutions portfolio to support both scale and strategic growth. On the left are what we call our turnkey solutions. These are full stack package offerings that integrate Napotech hardware, software, and industry frameworks into repeatable solutions that are easier for customers to deploy while providing Napa Tech a strong digital mode of differentiation. This is where we drive scalability, strong margins, and long-term differentiation with solutions that can be broadly replicated across customers and use cases. On the right are frontier solutions. These are advanced performance-driven deployments developed through technical collaboration with customers and partners to solve cutting-edge infrastructure challenges particularly in emerging AI-driven environments. While these engagements typically require more customization and technical depth, they deliver higher absolute revenue and margins, and they position Apotech at the forefront of evolving infrastructure architectures and cutting-edge technologies. Importantly, both solution types serve customers across our core and AI infrastructure markets. Over time, our strategies to deliberately transition successful frontier innovations into standardized turnkey offerings, turning cutting-edge solutions into scalable platforms that can drive repeatable revenue growth. This approach allows us to continuously innovate at the frontier while building a growing base of scalable high-value solutions. Napotex differentiation and programmable networking is reinforced by our deliberate ecosystem strategy. Our longstanding partnership with Altera provides access to advanced programmable silicon and a mature development ecosystem, enabling scalable data center class solutions that combine hardware acceleration with robust software. This relationship strengthens our ability to address AI inferencing architectures where performance, flexibility, and efficiency are critical. This unique partnership with Altera and Intel has been years in the making, and the products and solutions are now becoming generally available. In this next section, I'd like to share with you two updates and news related to examples of the success and potential we see from these new solutions. This slide highlights our technology is being adopted within AI-influencing environments by D-Matrix for Ethernet-based scale-out networking. In 2025, D-Matrix completed the public launch of their JetStream product powered by Navatek. We remain excited about the potential from this design. D-Matrix is the creator of Corsair, the world's most efficient artificial intelligence computing platform used for inferencing in data centers. Inferencing is where AI transitions from experimentation to real-world deployment, generating decisions and insights at scale. As these workloads expand, networking becomes a critical determinant of performance, latency, and overall system efficiency. Our programmable NIC solution is designed to support distributed multi-node AI inference across scale-out networks. We have successfully delivered to specification under a structured development program, and now we are closely working with the customer as they move toward broader deployment phases. We believe this positions us well as these platforms transition from initial integration into scale production environments. Importantly, the solution is architected for replication. The requirements we address here, low latency, deterministic performance, hardware accelerated traffic steering, and CPU offload are consistent with what we see across multiple AI infrastructure opportunities. This is how we invest at the leading edge, validate in demanding environments, and then extend those capabilities across additional customers pursuing AI deployments. In this slide, we highlight a second strategic proof point with a leading tier one server platform provider, one many of you will recognize from our prior updates. And I'm pleased to share that the program continues to progress as planned. We have delivered the defined solution milestones on schedule and in line with customers' technical requirements, as is typical with tier one OEM product programs. This engagement is following a disciplined multi-phase deployment and development process. We are now in an active proof of concept phase focused on two high value acceleration vectors. supported closely by our silicon partner Altera throughout the program. The first is inline data reduction, including hardware assisted compression and deduplication assist aimed at improving storage efficiency and lowering overall infrastructure costs. The second is low latency AI storage interconnect, leveraging RDMA based data movement to enable deterministic high throughput access between compute and storage, a foundational requirement for scalable AI workloads. Most importantly, execution is tracking exactly along the structured path we established from initial technology validation through proof of concept into early deployment stages and ultimately towards scalable production. This discipline progression continues to reduce technical and commercial risk while building momentum toward broader adoption. The last few slides of our update today provide more details on the financial results for our fourth quarter and full financial year of 2025. I'd like to ask our CFO Klaus to provide this update.