Napatech (NAPA) Q4 2015 earnings summary

Executive summary

• FY2015 revenue was 216.6 MDKK, up 19% YoY; EBITDA margin was 16%, with growth accelerating in Q4.

• Q4 revenue rose 44% YoY to 69.9 MDKK, and EBITDA margin reached 23%; 2016 guidance called for ~20% revenue growth and ~20% EBITDA margin.

Financial highlights

• Q4 revenue was 69.9 MDKK, up 44% YoY and 16% QoQ; gross margin was 73%, flat YoY.

• Q4 EBITDA was 16.3 MDKK vs. 4.6 MDKK YoY; EBT was 7.6 MDKK vs. a 0.3 MDKK loss.

• FY2015 revenue was 216.7 MDKK vs. 182.3 MDKK; EBITDA was 34.2 MDKK vs. 18.0 MDKK, and EBT was 11.0 MDKK vs. a 0.7 MDKK loss.

Outlook and guidance

• FY2016 guidance: revenue growth around 20% and EBITDA margin around 20%; management expected continued margin expansion.

• Growth drivers included continued 10G deployment, accelerating 100G adoption in telecom and data centers, cybersecurity demand, and the Pandion Flex product line.

• FY2016 targets included gross margin ~70%, overall costs up 5%, net cash >40 MDKK with +/-10 MDKK range, and continued R&D investment.

• Long-term ambition: become the leading smarter data delivery vendor and reach $100M revenue by 2020.