Danish networking hardware company Napatech reported a 55% year-over-year revenue increase in the second quarter of 2026, reaching $7.4 million, while its shares remained flat at $41.60. The company, listed on the Oslo Stock Exchange, disclosed the results during an earnings call on Thursday.
Revenue for the first half of 2026 climbed 61% to $13.1 million, driven by a 65% surge in its core infrastructure segment, which now accounts for the majority of its business. Gross margins expanded to 67.3% in Q2 and 68.3% in the first half, reflecting strong pricing power. However, EBITDA losses narrowed to negative DKK 6.6 million in Q2 from negative DKK 19.6 million a year earlier.
Chief Executive Officer Kartik Srinivasan highlighted the company's progress in transitioning from engineering engagements to production orders, noting 12 new design wins in the core infrastructure segment during the first half. He emphasized the shift toward higher-speed, higher-value products with elevated average selling prices, which he said would reduce the correlation between revenue growth and unit volume increases.
Chief Financial Officer Klaus Skovrup reported that the company had built inventory to meet anticipated demand in the second half, contributing to negative free cash flow of DKK 35.3 million in Q2. Skovrup projected that revenue exceeding $10 million in the coming quarters could bring the company closer to cash flow neutrality, potentially turning positive in the next two quarters.
Napatech maintained its full-year 2026 revenue guidance at DKK 200 million to DKK 240 million, with gross margins expected to remain between 60% and 70%. The company lowered its unit volume outlook to 7,700-9,700 units, reflecting the strategic focus on higher-value products. At the end of Q2, Napatech held DKK 62.7 million in cash and cash equivalents, with total available liquidity of DKK 84.3 million.
The company's shares have traded between $20.40 and $60.00 over the past year, with the current price sitting about 30.7% below the 52-week high and 103.9% above the low.
