<a id="bm-comp-e8c04cf6-3e0f-4ed9-a1c1-157adbb57586" name="bm-comp-e8c04cf6-3e0f-4ed9-a1c1-157adbb57586" class="BMCustomAnchor"></a><table><tr><td bm-component-id="e8c04cf6-3e0f-4ed9-a1c1-157adbb57586" style="vertical-align: top; width:100.000000%;"><ul><li>Q3 in line, limited news on design wins</li><li>Reiterates target of 4-6 design wins in 2024</li><li>Ambition of 50-60k units implies P/E of 4.2-2.4x</li></ul></td></tr></table><a id="bm-comp-759afd23-d486-4d72-836c-9ccc3d98a47d" name="bm-comp-759afd23-d486-4d72-836c-9ccc3d98a47d" class="BMCustomAnchor"></a><table><tr><td bm-component-id="759afd23-d486-4d72-836c-9ccc3d98a47d" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3" style="text-align:left;"><font color="#000000"><font style="background-color:#ffffff;">Q3 in-line, a small new design win</font></font></h3><p>Q3 revenue of DKK 34m and EBITDAC of DKK -19m was as we expected. Cash burn was DKK 27m, offset by debt, i.e. the cash position of DKK 103m was flat q-o-q. Napatech announced one new IPU design win with the startup Myrtle.AI, which could be up to ~1k units p.a. The company has thus announced 3 IPU design wins so far in 2024, but in our estimates we only include 20k units from the first design win with a Tier 1 server OEM, as the potential with the startups SigmaX.AI and Myrtle.AI are highly uncertain in our view. Napatech says it has made good progress on potential new designs, but '24 is soon over, and it needs to deliver at least one more design win before YE to meet its guidance of 4-6 design wins this year. One new design that could potentially land before YE is the streaming service provider (which we believe is Disney+), with potential of ~5k/units p.a.</p><h3 class="bm-h3"><font color="#000000">We cut '24e revenue by 10% but lift '25e by 3%</font></h3><p>The legacy business improved in Q3 and should improve further in H1'25 as the large customer NetScout depletes its inventory, while we expect costs to remain mostly stable. We also expect the start-up of the F5 contract and some non-recurring engineering costs (NRE) to contribute to reduced cash burn in H1'25. We cut '24e revenue by 10% as we postpone some revenue to '25e, which increases by 3%. We make only minor tweaks to '26e, awaiting more updates on the progress of new and existing design wins.</p><h3 class="bm-h3"><font color="#000000">'25-'26 ambitions imply EPS of NOK 6.4-11.1</font></h3><p><font style="background-color:#ffffff;">T</font>he ASP and GM on the new IPUs are still uncertain, so we show some scenarios (see pp. 4-6) to illustrate the range of potential outcomes if the company reaches its target. Assuming an ASP of USD 4,000-4,500 and GM of 50-70%, the guidance of 50-60k IPUs shipped in '26/'27 could give an EPS of NOK 6.4-11.4, which would correspond to a P/E of 4.2-2.4x.</p></td></tr></table>