Napatech (NAPA) Q4 2016 earnings summary

Executive summary

• Record Q4 revenue of 92.3 MDKK, up 32% YoY; full-year revenue reached 234.7 MDKK, up 8% and within guidance.

• Recent Accelerator and Pandion design wins, new customers and an OEM rollout contributed to Q4 growth; 2017 guidance calls for 10%–20% revenue growth and ~20% EBITDA margin.

Financial highlights

• Q4 revenue was 92.3 MDKK, up 32% YoY and 86% QoQ; USD sales were $13.3M, up 27% YoY.

• Q4 EBITDA was 28.0 MDKK, up 11.7 MDKK YoY; EBIT was 17.7 MDKK versus 7.5 MDKK, and EPS was 0.56 DKK versus 0.22 DKK.

• Full-year revenue was 234.7 MDKK, up 8%; EBITDA margin was 19%.

• Q4 operating cash flow was 5.7 MDKK versus 31.1 MDKK in Q4 2015; quarter-end cash was 47.0 MDKK versus 75.9 MDKK YoY.

Outlook and guidance

• 2017 guidance: revenue growth of 10%–20%, gross margin around 68% and EBITDA margin around 20%.

• Profitable growth is expected to continue across business areas; management cited limited near-term visibility due to quarterly order fluctuations and general uncertainty.

• Long-term ambition: $100M top line by 2020, supported by market expansion, product investment and Tier 1 customer penetration.