Napatech (NAPA) Q4 2019 earnings summary

Executive summary

• FY 2019 was described as a turnaround year with record results, solid revenue growth, strong margins, positive EBITDAC and positive free cash flow.

• Revenue was supported by existing and new customers; product enhancements and momentum carried into 2020.

Financial highlights

• FY 2019 revenue was DKK 170.6M, up 62% YoY on a comparison basis adjusted for revenues from a divested 2018 product line; Q4 revenue was DKK 54.0M, up 36%.

• FY gross margin was 74.5%, up 28.3 percentage points on reported numbers; Q4 EBITDAC was positive at DKK 5.8M and FY EBITDAC was positive at DKK 1.4M.

• FY operating expenses were DKK 111.9M; staff costs declined 12% YoY and other external costs declined 29% when adjusted for IFRS 16.

• FY net cash from operating activities was DKK 26.4M; free cash flow was DKK 12.6M, up DKK 94.1M YoY.

Outlook and guidance

• FY 2020 guidance: revenue DKK 185–205M, gross margin 68–72%, staff expenses and other external costs DKK 125–135M, and capitalized development costs DKK 15–20M.

• Guidance also included depreciation and amortization of DKK 20–25M; at mid-range performance, EBITDAC was expected at DKK 6.5M and EBIT at DKK 1.5M.