Danish networking technology company Napatech A/S reported a 55% increase in second-quarter revenue as its core infrastructure business continued to expand, while the company maintained its strategic pivot toward artificial intelligence applications.
The company posted Q2 revenue of $7.4 million, up from $4.8 million in the same period last year, according to slides presented on August 25. For the first half of 2026, total revenue reached $13.1 million, a 61% increase compared with the prior-year period. Gross margin remained stable at 67.3% in Q2, compared with 66.9% a year earlier.
Napatech narrowed its quarterly EBITDA loss to negative DKK 6.6 million from negative DKK 19.6 million in Q2 2025, while H1 EBITDA losses improved to negative DKK 24.8 million from negative DKK 48.7 million a year ago. Operating cash flow remained negative at DKK 32.1 million in Q2, though free cash flow showed improvement, totaling negative DKK 35.3 million for the quarter.
The company’s core infrastructure segment delivered $12.8 million in H1 revenue, a 65% increase year-over-year, with gross margins near 70% and 12 new design wins secured. By contrast, AI infrastructure revenue declined slightly to $0.3 million from $0.4 million in the prior-year period. Unit volumes rose 20% in H1 to 2,671 units, though management adjusted its full-year volume guidance to 7,700–9,700 units, down from the previous 8,700–10,700 range, reflecting a shift toward higher-value, higher-speed products.
Geographically, revenue from the Rest of World region surged 141% year-over-year to $5.9 million, while Americas revenue grew 27% to $7.3 million. Napatech maintained its full-year 2026 revenue guidance at DKK 200–240 million, with gross margins projected between 60% and 70%. The company expects quarterly revenue to exceed $10 million in both Q3 and Q4, moving toward cash flow neutrality.
CFO Klaus Skovrup stated that with expected revenues exceeding $10 million in coming quarters, the company should approach cash flow neutrality and potentially achieve positive free cash flow in the next two quarters. Management described core infrastructure as the "profitable foundation" and AI infrastructure as the "next growth engine," noting progress toward commercial production for AI-related offerings.
Napatech’s cash and equivalents stood at DKK 62.7 million at quarter-end, with total available liquidity of DKK 84.3 million, including undrawn credit facilities of DKK 21.6 million. The company’s shares traded flat at $41.60 following the presentation, within a 52-week range of $20.40 to $60.00.
