CONTENTS
Management’s Review
CEO Perspective 3
The Napatech Opportunity 4
Board and Management Presentation 6
Group Key Figures and Ratios 9
Financial Review 11
Corporate Governance 13
Corporate Social Responsibility 15
Shareholder Information 19
Financial Statements
Consolidated Financial Statements 20
Notes to the Consolidated Statement 27
Parent Company Financial Statements 55
Notes to the Parent Company Financial Statement 62
Statements 73
Management’s Review
Annual Report 2025 3
CEO PERSPECTIVE
Confident, Focused, and Built for the AI Data Center Era
2025 was a pivotal year for Napatech. We entered the year with
a bold ambition: to transform Napatech into an indispensable
acceleration platform for the AI data center era. Today, we stand
stronger, more focused, and better positioned than at any point
in our history. Our financial performance, technology leadership,
and expanding ecosystem all point to one conclusion—Napatech
is on the right trajectory, and the opportunity ahead of us is
larger than ever.
We delivered 33% annual revenue growth in 2025, with Q4 rev-
enue rising 48% year-over-year, supported by stable 70% gross
margins. We improved EBITDA by DKK 28 million in 2025, re-
duced net working capital from DKK 99 million to DKK 83 million,
and strengthened our cash position to DKK 127 million up from
DKK 64 million in 2024. These results reflect a disciplined execu-
tion and a business model that is scaling with efficiency and pur-
pose. Our successful NOK 200 million capital raise early in the
year enabled us to support a rapidly expanding design-win pipe-
line.
And the true story of 2025 extends beyond the numbers.
We deepened our strategic partnerships with industry leaders,
including a tier-1 server OEM, Altera, Intel, and AI-inference in-
novator d-Matrix. The launch of the JetStream AI networking in-
terface card—highlighted across industry and financial press—
underscored Napatech’s relevance in next-generation AI data
center architectures. Our R&D organization delivered every
milestone for our lead customers on time and to specification,
even as requirements grew more complex and timelines more
demanding.
We strengthened our ecosystem with partners across AI infra-
structure, cybersecurity, fintech, mobile networking, and net-
work monitoring. Companies such as Broadcom-Symantec, Ei-
deticom, Myrtle.ai, Xelera, Kontron, Supermicro, A5G, and Tru-
minds are helping us bring complete, market-defining solutions
to customers worldwide.
We also remained laser-focused on design wins—the engine of
our long-term growth. In 2025, we secured 27 unique design
wins, each representing a future revenue stream and a valida-
tion of our technology. These wins came from both direct en-
gagements and our expanding partner ecosystem, demonstrat-
ing the scalability of our go-to-market model.
Across the industry, the forces shaping the next decade are un-
mistakable. AI workloads are exploding. Data movement is be-
coming the new bottleneck. Enterprises and cloud providers are
rearchitecting their infrastructure around acceleration, effi-
ciency, and security.
This is the world Napatech was built for.
Our SmartNIC and DPU platforms—powered by Altera and In-
tel—are aligned with the highest-growth segments of AI, stor-
age, networking, cybersecurity, and fintech. Our software invest-
ments are enabling scalable, repeatable solutions that can be de-
ployed broadly across the mass market. And our leadership
team, strengthened with seasoned industry veterans, is focused
on disciplined execution and long-term value creation.
As we enter 2026, Napatech is operating from a position of mo-
mentum, clarity, and confidence. We have a strong financial
foundation, a differentiated technology roadmap, a growing
ecosystem, and a design-win pipeline that will anchor our
growth for years to come.
Most importantly, we have a clear mission: to become the accel-
eration platform of the AI data center era—and to deliver sus-
tainable, long-term value for our shareholders.
We are executing with conviction. We are investing with pur-
pose. And we are building a company designed to lead.
Napatech’s future is bright, and we are just getting started.
Fully committed and focused,
Kartik Srinivasan
Chief Executive Officer
The Napatech Opportunity
Annual Report 2025 4
THE NAPATECH OPPORTUNITY
High-Performance Networking Powering Core and AI Infrastructure
Napatech addresses two structurally converging markets —
Core infrastructure and AI infrastructure — both of which in-
creasingly depend on deterministic, hardware-accelerated
networking to deliver predictable performance, efficiency,
and economic value at scale.
Across both markets, traditional best-effort networking is
reaching its limits. Modern data centers are no longer defined
solely by bulk throughput, but by distributed, latency-critical
systems where tail latency, jitter, and predictability directly
determine application performance and business outcomes.
This shift is being driven by:
• Scale-out AI inferencing pipelines
• Retrieval-augmented generation and data-intensive work
flows
• Real-time control and decision systems
• Multi-tenant, mixed-criticality infrastructure
In these environments, the network sits on the critical execu-
tion path.
Core Infrastructure Market: Where Determinism Is Mis-
sion-Critical
In enterprise, cloud, telecom, government, and regulated en-
vironments, infrastructure workloads already demand deter-
ministic performance.
These systems support:
• Networking and Security Microservices
• Storage acceleration and data movement
• Network and Application Monitoring
• 5G mobile packet core with user plane functions
• Financial services and ultra-low latency systems
Here, performance variability is not acceptable. Predictability,
reliability, and efficiency define system value.
Napatech’s programmable NICs are embedded in perfor-
mance-critical systems by delivering:
• Predictable low tail latency
• Line-rate processing under real-world load
• CPU isolation and offload
• Deterministic traffic handling
This market represents Napatech’s durable core infrastruc-
ture foundation.
AI Infrastructure Market: Where Networking Becomes
Part of the Compute Engine
Unlike training workloads, inferencing systems are highly dis-
tributed, latency-sensitive, and economically driven by effi-
ciency at scale. Inferencing pipelines increasingly involve fan-
out and fan-in across accelerators, memory, storage, and ser-
vices.
In these systems, networking is no longer passive connectivity
— it becomes a core component of the inference engine it-
self.
System performance and cost per inference now depend on:
• Predictable tail latency
• Intelligent traffic steering
• Hardware-accelerated data movement
• Offload of critical control and processing functions
Across hyperscalers, tier-2, neo-cloud, and sovereign cloud
environments, as well as on-prem enterprise deployments,
achieving this level of determinism increasingly requires spe-
cialized networking capabilities. While hyperscalers often rely
on custom silicon and vertically integrated fabrics, the
broader market must achieve similar outcomes using open,
commercially supported infrastructure — creating a large and
expanding opportunity for programmable, deterministic net-
working platforms.
This market represents an unprecedented growth oppor-
tunity, driven by the structural need for deterministic, high-
performance programmable networking in AI infrastructure.
Napatech’s Moat: Determinism Through Software Ex-
cellence
While programmable NIC hardware is increasingly available,
true differentiation lies in software. Napatech’s competitive
moat is its deep, production-proven software platform that
transforms programmable silicon into deterministic, high-per-
formance data planes.
This platform enables:
• Application-aware packet processing directly in hardware
• Fine-grained flow control and steering
• Predictable latency under congestion and scale
• Efficient offload of complex networking functions
Years of hardware-software co-design expertise allow Na-
patech to deliver capabilities that are extremely difficult to
replicate with commodity NICs or software-only acceleration.
AI inferencing is rapidly emerging as the primary driver of
modern data center growth.
The Napatech Opportunity
Annual Report 2025 5
Turnkey and Frontier Solutions Across Core and AI In-
frastructure
Napatech’s programmable NIC portfolio is strategically posi-
tioned across two complementary solution domains:
Turnkey Solutions
Full-stack packaged platforms developed by Napatech, deliv-
ering deterministic performance for Core & AI infrastructure
workloads including security, storage, telecom, monitoring,
and regulated systems.
These solutions:
• Drive repeatable, scalable revenue
• Enable rapid deployment across established architectures
• Deliver predictable performance with operational effi-
ciency
Frontier Solutions
Advanced programmable platforms leveraging Napatech
hardware and foundational software while partnering with
Independent Software Vendor (ISVs) as needed.
These solutions:
• Power distributed, latency-sensitive AI inferencing environ-
ments
• Maximize performance through hardware-accelerated data
movement and intelligent traffic steering
• Require focused investment and deep customer collabora-
tion
• Capture immediate growth in structurally expanding AI
markets
Turnkey solutions scale proven infrastructure with efficiency
and repeatability.
Frontier solutions operate at the cutting edge of AI data cen-
ter design — delivering performance advantages that materi-
ally impact system economics.
Together, this portfolio allows Napatech to drive durable rev-
enue while expanding aggressively into high-growth AI infra-
structure where smart networking is becoming foundational.
Strategic Positioning for the Next Data Center Era
Napatech sits at the intersection of two structurally converg-
ing markets — core infrastructure and AI infrastructure —
both increasingly dependent on deterministic, hardware-ac-
celerated networking. Through a focused portfolio of Turnkey
Solutions that scale proven workloads and Frontier Solutions
that unlock cutting-edge AI performance, Napatech is
uniquely positioned to deliver predictable, efficient, and eco-
nomically scalable systems. As data centers continue to de-
centralize and intensify in performance demands, determinis-
tic networking becomes architectural necessity — compound-
ing Napatech’s strategic relevance and long-term growth op-
portunity.
Board and Management Presentation
Annual Report 2025 6
Lynn A. Comp
CFO – Klaus H. Skovrup
Zane Ball
BOARD AND MANAGEMENT
PRESENTATION
BOARD OF DIRECTORS
MANAGEMENT TEAM
BOARD OF DIRECTORS
Lars Boilesen, Chairman of the Board. Born in 1967. Member of the Board since 2017, CEO of Napatech in 2024 and 2025, re-elected
as Chairman in January 2026, term expires 2026.
Holds a bachelor’s degree in Business Economics from the Aarhus School of Business and a postgraduate diploma from Kolding Business
School. Lars Boilesen does not fulfil the Committee of Corporate Governance definition of independence as he acted as CEO within the
past 5 years.
Other directorships: Chairman of the Board for Cobuilder AS.
Special competencies: Lars Boilesen has extensive experience in the international software and technology industry. He currently serves
as Chief Executive Officer for the Norwegian-listed software company Opera Software ASA (Opera), where he has overseen the sale of
the company’s browser, privacy and performance apps to a Chinese consortium. He has also been involved in a number of acquisitions,
including that of AdColony in 2014. Prior to becoming the CEO of Opera in 2010, Boilesen served as the company’s Executive Vice Presi-
dent of Sales & Distribution from 2000 to 2005 and was on the Board of Directors from 2007 to 2009. Boilesen spent several years at
Tandberg as head of the Northern Europe and Asian-Pacific markets and as Vice President of Worldwide Sales and Sales Director. He also
served as CEO for the Nordic and Baltic Region at Alcatel-Lucent and as Marketing Manager for Eastern Europe in LEGO Group.
Board and Management Presentation
Annual Report 2025 7
Christian Jebsen, Member of the Board. Born in 1967. Member of the Board since 2019, re-elected in 2025, term expires 2026.
Holds a B.S. degree in economics and a B.A. from Copenhagen Business School. Christian Jebsen represents the second largest share-
holder, controlling 9.1% of the shares in Napatech A/S. Christian Jebsen fulfills the Committee of Corporate Governance's definition of
independence.
Other directorships: Jebsen has multiple board positions in portfolio companies of Verdane Capital.
Special competencies: Christian Jebsen is a partner at Verdane Capital. Prior to Verdane, Jebsen has had a number of executive manage-
ment positions in listed and unlisted companies, including CEO of Kebony AS, CEO of Vmetro ASA, CFO/COO of Opera Software ASA, and
CEO of Stavdal ASA. Jebsen’s professional background also includes seven years of investment banking experience with Nomura Interna-
tional in London and Enskilda Securities (SEB) in Stockholm and Oslo.
Lynn A. Comp, Board member. Born in 1968. Member of the Board since 2025, term expires 2026.
Holds a Bachelor of Science in electrical engineering from Virginia Tech and an MBA from University of Phoenix. Lynn A. Comp fulfills the
Committee of Corporate Governance's definition of independence.
Other directorships: Member of the Board at Neu Reality.
Special competencies: Lynn Comp has a wide range of experiences spanning her ~30 years in the tech industry, from strategic planning
and go to market of RISC SOCs for both communications infrastructure and mobile phones, to software pipelines laying the groundwork
for rapid video-based ser-vices innovation, to pioneering the foundational libraries that paved the way for ‘software defined’ networking
with telecommunications operators. Lynn has extensive experience in marketing, product management, product planning, and strategy
development across software, hardware, cloud, and communications service providers (CoSPs).
Patty Kummrow, Board member. Born in 1970. Member of the Board since 2025, term expires 2026.
Holds a B.S. in Electrical Engineering from the University of Texas and a M.S. in Technology Management from Walden University. Patty
Kummrow fulfills the Committee of Corporate Governance's definition of independence.
Other directorships: Board member and Independent Director for Synaptics (SYNA).
Special competencies: Patty Kummrow has over 30 years of experience in the technology industry as an engineering leader, general
manager, and board member. As General Manager of Intel’s Cloud Networking Group, she grew revenue to >$1B by balancing long-
standing foundational products with strategic growth, and drove large-scale efforts to accelerate innovation and access new markets.
Previously, she led global engineering teams at Intel and Hewlett-Packard to develop data centre products to support the rapid growth
of cloud, enterprise, and communications markets. Ms Kummrow has served as an Independent Board Director for Synaptics since 2020
and chairs the Nomination and Governance Committee.
Shannon Poulin, Vice-Chairman of the Board. Born in 1971. Vice Chairman of the Board since 2025, re-elected in 2025, term expires
2026.
Holds an undergraduate degree in Electrical Engineering and a graduate degree in Business Management, and he has been awarded
multiple patents. Shannon Poulin fulfills the Committee of Corporate Governance's definition of independence.
Other directorships: No other directorships or executive functions.
Special competencies: Shannon Poulin has a proven track record of inspiring and leading teams with over 30 years of experience in the
technology industry. He has spent his career in high-tech product development, management, and driving profitable business growth.
He has held leadership and executive positions at Microchip, Intel, Altera, and Teradyne.
Svenn Tore Larsen, Board member. Born in 1959. Member of the Board since 2024, re-elected in 2025, term expires 2026.
He is is an electronic engineer from the University of Strathclyde, UK. Svenn Tore Larsen fulfils the Committee of Corporate Governance's
definition of independence.
Other directorships: Chairman of the board in Norwegian listed Elliptic Laboratories ASA, and a member of the Board in Norwegian listed
Polight ASA.
Special competencies: Svenn-Tore Larsen is a Norwegian citizen residing in Norway. He served as CEO of Nordic Semiconductor ASA from
2002 to 2023. Larsen has broad international experience in the semiconductor business, previously as Director for the Nordic region of
Xilinx Inc. He has also worked at Philips Semiconductor.
Zane Ball, Board member. Born in 1969. Member of the Board since 2025, term expires 2026.
Holds a bachelor’s degree, a master’s degree, and a Ph.D. in electrical engineering, all earned from Rice University. He also holds six
patents in high-speed electrical design. Zane Ball fulfills the Committee of Corporate Governance's definition of independence.
Other directorships: No other directorships or executive functions.
Special competencies: Zane Ball is a seasoned technology executive and semiconductor industry leader, bringing nearly three decades
of experience in the development and enablement of silicon products and computing platforms for data center, AI, client computing,
and foundry services. Formerly a key executive and corporate officer at Intel Corporation, Dr Ball has played a pivotal role in shaping
industry standards and enabling new technologies for widespread adoption. Most recently Dr. Ball led Intel’s Datacenter and AI product
management team following years of leadership as the Corporate Vice President of Datacenter Platform Engineering and Architecture.
Ball’s team was responsible for designing and validating the latest Intel Xeon® data center platforms and enabling Intel’s customers to
deploy at scale. Prior to his data center role, Ball was co-general manager of Intel’s silicon foundry business as a VP in the Technology
and Manufacturing group. Ball has also served as a VP of the Client Computing Group, including roles as general manager of the desktop
client business and leader of global customer engineering based in Taipei.
Board and Management Presentation
Annual Report 2025 8
EXECUTIVE MANAGEMENT
Kartik Srinivasan, CEO. Born in 1977. CEO since January 2026.
SHARES AND WARRANTS OF BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT AS OF DECEMBER 31, 2025.
Number of
shares 31
Change in
December
fiscal ye ar,
2024
shares
Number of
shares 31
December
2025
Total
number of
w arrants 31
December
2024
Number of
w arrants
granted in
2025
Number of
Total
w arrants
number of
exercised w arrants 31
or lapsed in
December
2025
2025
Board of Directors
Christian Jebsen
-
-
-
-
-
-
-
Lynn A. Comp
-
-
-
-
-
-
-
Patricia Kummrow
-
10,000
10,000
-
10,000
-
10,000
Shannon Poulin
-
18,330
18,330
-
10,000
-
10,000
Sven-Tore Larsen
-
-
-
-
-
-
-
Zane Ball
-
-
-
-
10,000
-
10,000
Exe cutive Managem ent
Lars Boilesen
512,564
-
512,564
2,312,376
-
-
2,312,376
Group Key Figures and Ratios
Annual Report 2025 9
GROUP KEY FIGURES AND RATIOS
KEY FIGURES (DKK '000)
2025
2024
2023
2022
2021
Revenue
146,609
116,408
182,674
158,628
195,471
Gross profit
101,876
79,359
133,548
89,697
140,358
Operating profit before depreciation, amortization and impairment (EBITDA)
(58,602)
(86,253)
(438)
(20,122)
52,915
Operating profit (EBIT)
(80,734)
(115,579)
(32,899)
(46,200)
30,662
Net finance income / (expense)
(4,385)
(1,508)
(3,546)
2,056
6,336
Profit / (loss) before tax
(85,119)
(117,087)
(36,445)
(44,144)
36,998
Profit / (loss) for the year
(80,655)
(111,257)
(32,016)
(48,259)
40,228
Investments in intangible assets
8,081
6,665
10,376
30,296
28,503
Investments in tangible assets
1,390
9,009
8,493
2,888
7,633
Net working capital
83,209
98,643
65,462
55,708
44,526
Total assets
271,955
229,926
194,295
193,968
176,726
Equity
204,693
153,423
111,710
88,255
133,472
Net cash flows from operating activities
(32,943)
(102,841)
(6,785)
(23,966)
14,950
Free cash flow
(42,230)
(113,984)
(19,475)
(56,704)
(16,003)
Cash at the end of year
127,470
64,341
42,367
11,962
39,449
Average number of employees
86
82
77
82
81
FINANCIAL REPORTING RATIOS (%)
Gross profit margin
69.5%
68.2%
73.1%
56.5%
71.8%
EBITDA margin
-40.0%
-74.1%
-0.2%
-12.7%
27.1%
Current ratio
457.4%
330.2%
226.5%
147.0%
313.3%
Return on equity
-45.0%
-83.9%
-32.0%
-43.5%
38.0%
SHARE RELATED RATIOS (DKK)
Basic EPS
(0.76)
(1.15)
(0.36)
(0.58)
0.48
Diluted EPS
(0.76)
(1.15)
(0.36)
(0.58)
0.47
Operating cash flow per share
(0.31)
(1.07)
(0.08)
(0.29)
0.17
Free cash flow per share
(0.40)
(1.18)
(0.22)
(0.68)
(0.19)
Group Key Figures and Ratios Annual Report 2025 10
The financial highlights and ratios are defined and calculated as following:
Ratio Calculation formula
Explanation
Gross profit
margin
Gross profit
x 100
Revenue
The ratio represents the percentage of the revenue
less cost of goods sold to cover staff costs, other
external costs, depreciation and amortization, and
finance costs.
EBITDA margin
Earnings Before Interest, Taxes,
Depreciation and Amortization
x 100
Revenue
The ratio represents an operating profitability
measure.
Current ratio
Current assets
x 100
Current liabilities
The ratio represents the percentage of the Group’s
resources to meet its liabilities over the next 12
months.
Return on
equity
Profit for the year
x 100
Average equity
The ratio represents the Group’s ability to generate
a return to shareholders taking into account its own
capital base.
Operating cash
flow per share
Cash flows from operating activities
x 100
Average number of diluted shares
The ratio represents the Group’s ability to generate
cash flow from operating activities per the average
number of diluted shares.
Free cash flow
per share
Free cash flow
x 100
Average number of diluted shares
The ratio represents the Group’s ability to generate
cash flow from operating and investing activities per
the average number of diluted shares.
Net working capital represents the value of inventories, trade receivables, and other current operating assets less trade payables,
and other current operating liabilities. Cash and cash equivalents and income tax receivable or payable are not part of the net
working capital.
Cash flows from operating activities are profit or loss before tax added or deducted changes in the net working capital, added or
deducted changes in provisions, and added the yearly depreciation and amortization.
Free cash flow is net cash flow from operating activities added or deducted investing activities.
The Group’s basic and diluted earnings per share (EPS) is calculated in accordance with IAS 33 and specified in note 13 to the
consolidated financial statements.
Financial Review
Annual Report 2025 11
FINANCIAL
REVIEW
FINANCIAL PERFORMANCE
Revenue increased by 33% in USD. Revenue of USD 22.2 million
in 2025 was within our latest expectations, whereas the revenue
of DKK 146.6 million in 2025 was slightly below the latest guid-
ance of DKK 150-190 million provided in November 2025 mainly
due to foreign exchange and a few orders being postponed into
2026.
Our gross margin was 69%, an increase of 1%-point compared to
2024, and within the latest guidance of 69-71%. Staff costs incl.
staff costs transferred to development costs & Other external
costs amounted to DKK 167.1 million, being below the latest
guidance of DKK 170-180 million due to various cost saving initi-
atives implemented. This also impacted the staff costs trans-
ferred to development costs, which amounted to DKK 6.6 million
and ended below the latest guidance of DKK 8-12 million.
EBITDA of DKK -58.6 million ended within the derived guidance
range due to the lower Staff costs & Other external costs.
To support the next steps forward with our current customers
and expanding design-win pipeline, Napatech successfully
completed a private placement capital raise of NOK 200 million
(DKK 130.7 million).
FINANCIAL DEVELOPMENT (2024 FIGURES IN BRACKETS)
In 2025, Napatech generated a total revenue of DKK 146.6 mil-
lion (DKK 116.4 million), representing an increase of 26%. The
increase reflects a pick-up in the 2025 market compared to the
challenging market conditions faced in 2024. Revenue from En-
gineering Services was at the same level as 2024. Revenue from
SmartNIC Products increased 26% in 2025 compared to 2024.
Revenue in North America increased 26% in 2025 compared to
2024, and revenue in Rest of the World increased 27% in 2025
compared to 2024.
The gross margin in 2025 was 69% compared to 68% in 2024. The
increase in the gross margin reflects an increase in the gross mar-
gin for SmartNIC. The average gross margin on our SmartNIC
grew from 67% in 2024 to 69% in 2025.
In 2025, our Staff costs and Other external costs, before staff
costs transferred to capitalized development costs, amounted to
DKK 167.1 million, compared to DKK 171.8 million in 2024. The
change from 2024 is due to reduced costs of subcontractors and
personnel during 2025 to balance our costs to the revenue. Staff
costs transferred to development costs in 2025 amounted to
DKK 6.6 million compared to DKK 6.2 million in 2024.
EBITDA in 2025 was negative DKK 58.6 million compared to
negative DKK 86.3 million in 2024. Depreciation, amortization,
and impairment in 2025 were DKK 22.1 million compared to DKK
29.3 million in 2024.
The result for the year was negative DKK 80.7 million (negative
DKK 111.3 million).
Napatech had total assets of DKK 272.0 million on December 31,
2025, compared with DKK 229.9 million on December 31, 2024.
The increase of DKK 42.0 million reflects an increase in current
assets of DKK 54.6 million primarily related to increases in cash
and cash equivalents due to the private placement, increase in
trade receivables due to large orders late in 2025 partly coun-
tered by a decline in inventories following a focused effort to re-
duce the levels and a decline in non-current assets of DKK 12.6
million primarily due to a lower level of development costs.
Napatech's total liabilities were DKK 67.3 million on December
31, 2025, compared to DKK 76.5 million on December 31, 2024.
The decrease in total liabilities was driven by a decrease in inter-
est-bearing loans and borrowings.
The group's equity at the end of the year was DKK 204.7 million
(DKK 153.4 million).
The group has in-house development resources, developing new
products and new functionality. The group also engages external
consultants for specific development projects. In 2025 DKK 8.1
million was capitalized (DKK 6.7 million).
The group had a positive net change in cash of DKK 63.1 million
(positive DKK 22.0 million). The net change in cash was impacted
by a positive net cash flows from financing activities of DKK 107.7
million due to a capital raise in May 2025, where Napatech raised
DKK 130.7 million in gross proceeds from a private placement of
10,000,000 shares which was partly offset by a negative free
cash flow of DKK 42.2 million primarily due to the negative
EBITDA.
FINANCIAL DEVELOPMENT IN THE PARENT COMPANY
Net revenues for the parent company in 2025 came in at DKK
118.7 million (DKK 87.8 million), representing an increase of
35%. The EBITDA in the parent company for 2025 was negative
DKK 61.2 million (negative DKK 88.1 million), and the result be-
fore tax was negative DKK 87.8 million (DKK 118.3 million). The
same developments as in the group are taking place.
DEVELOPMENT ACTIVITIES AND KNOWLEDGE
Napatech has consistently emphasized innovation, especially in
the development of cutting-edge SmartNIC-based products and
solutions. This commitment remained strong throughout 2025,
with continued investment in research and development for new
and existing markets.
Our leadership in technology is underscored by the continuous
introduction of new and advanced products and functionalities
across our extensive portfolio, ranging from 10 to 400 gigabits.
Financial Review
Annual Report 2025 12
In 2025, our strategic initiatives have not only enhanced our
product offerings but also expanded their applicability, making
them more versatile for a diverse array of customers and net-
work environments.
The majority of our R&D efforts in 2025 focused on developing
DPU solutions and tapping into the growing market within data
centers, cybersecurity, and network management. These initia-
tives have led to the formation of significant strategic partner-
ships, laying a strong foundation for anticipated revenue growth
in the coming years. Our development teams, organized into ag-
ile, cross-functional units, foster optimal information exchange
and nimble product development. We leverage advanced IT
tools for efficient knowledge sharing, ensuring that our develop-
ment activities, all centralized in Denmark, are marked by excep-
tional collaboration, focus, and operational excellence. This stra-
tegic approach positions Napatech optimistically for future
growth and innovation.
DIVIDEND
So far, the Company has not distributed any dividends and does
not expect to do so in the near future.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2025, the Group had cash and cash equiva-
lents of DKK 127.5 million. With the cash position at the end of
2025 and the Group's credit facilities for 2026, Napatech’s oper-
ations in 2026 are fully funded. See note 27 in the notes to the
consolidated financial statements for more information on fi-
nancial risk management objectives and policies.
LEGAL MATTERS
There are currently no significant legal proceedings involving any
company in the Napatech group.
GROUP ENTITIES
The United States subsidiary has an office in Portsmouth, NH.
EVENTS AFTER YEAR-END
No material events occurred after December 31, 2025, that have
consequences for the 2025 Annual Report.
OUTLOOK
2026 guidance for the Company is the following:
Target in DKK million
Guidance
Units sold
8,700-10,700
Revenue
200-240
Gross margin
60-70%
Staff costs & Other external costs
170-180
Staff costs transferred to capitalized develop-
ment costs
5-8
With performance in the middle of the guided ranges, EBITDA
would be negative around DKK 25 million, and units sold would
be around 9,700 which is slightly lower than earlier communi-
cated following a shift to high value products coming with a
higher average selling price.
The Company is exposed to risks that might affect our ability to
reach our goals, such as currency fluctuations, general market
uncertainty, and material changes in our large OEMs' needs for
Napatech's products.
Additionally, in 2025 and ongoing in 2026, we have seen increas-
ing market uncertainty, particularly related to potential trade
barriers, including tariff increases in the United States. With our
products manufactured in the US and the majority of our cus-
tomers also located in the US, the group is not significantly ex-
posed. However, the lack of predictability and uncertainty sur-
rounding tariff increases is a concern, and we will be monitoring
the development closely.
Corporate Governance
Annual Report 2025 13
Nomination
Committee
Board of Directors
Remuneration
Committee
Audit
Committee
General Shareholder Meetings
Executive Management Team
CORPORATE
GOVERNANCE
CORPORATE GOVERNANCE
The Company's Board of Directors recognizes the importance of
good Corporate Governance. This is ensured through interaction
between shareholders, the Board of Directors, and the admin-
istration. Napatech's goal is that all interested parties are confi-
dent that the group's activities are carried out acceptably and
that the governing body has sufficient insight and influence to
undertake their functions.
The communication between the Company and shareholders
primarily takes place at the annual general meeting, quarterly
reporting, and via company announcements. The company
shareholders are encouraged to subscribe to our newsletter ser-
vice to receive company news via email.
Guidelines on Corporate Governance are approved annually by
the Board of Directors or when deemed necessary.
Napatech A/S is subject to Danish law but is listed on Euronext
Oslo. Napatech follows the Danish recommendations for good
Corporate Governance. The Company follows the majority of the
Danish recommendations for good Corporate Governance ex-
cept for a few areas where Napatech has chosen a different ap-
proach compared to the recommendations. The statutory report
on Corporate Governance is available at http://www.na-
patech.com/corporate-governance/report2025.
The Board of Directors has established two committees within
the Board: the Remuneration Committee and the Audit Commit-
tee, which both are sub-committees of the Board (the Board
committees report to the Board of Directors) and operate ac-
cording to the established internal procedures for each commit-
tee decided by the Board of Directors.
The Remuneration Committee is composed of three members of
the Board of Directors. Patricia Kummrow is the Chairman of the
Remuneration Committee, and Lynnn Comp and Zane Ball are
members.
The Remuneration Committee handles the Company's remuner-
ation policy and program and presents recommendations to the
Board of Directors for decision according to its meeting proto-
cols and underlying material prepared. The committee annually
evaluates the CEO's remuneration and presents recommenda-
tions to the Board of Directors for a decision. When the Compa-
ny's remuneration policy proposes a change, it is subject to ap-
proval in the annual general meeting. The committee has pre-
pared a separate Remuneration Report to be presented at the
annual general meeting. The remuneration report provides an
overview of the total remuneration received by each member of
the Board of Directors and the executive management board of
Napatech. The report is available at http://www.na-
patech.com/remuneration/report2025.
The Audit Committee is composed of two members of the Board
of Directors. Svenn Tore Larsen is the Chairman of the commit-
tee, and Christian Jebsen is the other member. This committee
supports the Board of Directors in fulfilling its responsibilities
concerning financial reporting, auditing matters, internal con-
trol, and risk matters. The Audit Committee has two meetings
per year with the company auditors.
The Company's Board of Directors shall have a diverse composi-
tion and competence tailored to meet the Company's needs. The
Board of Directors' work complies with the Company's internal
instructions, guidelines, and procedures for the Board members.
The Board normally also carries out a self-assessment of its ac-
tivities and competence.
The Company's corporate governance guidelines, including the
annual Corporate Governance status, can be found in the inves-
tor relations section www.napatech.com/investor-relations.
RISKS AND UNCERTAINTIES
The group is, due to its normal course of business, exposed to
many risk factors. The group operates in a technology market
that could change the need for the solutions that Napatech pro-
vides. The customers are mainly large tier-one customers with
normal credit terms. The group is not significantly exposed to
credit risks, but as some customers are large, the outstanding
amounts can potentially be substantial.
The group is exposed to operational risks due to the dependence
on suppliers to deliver both components and the finished prod-
ucts necessary to recognize revenue. The group's growth partly
depends on the delivery and adoption of new products and func-
tionalities by the market.
As the group has all revenue in USD, as well as some financial
assets in USD, there is a risk that fluctuations in the USD ex-
change rate will affect our financial performance.
See notes 3 and 27 in the notes to the consolidated financial
statements for more information on risks and uncertainties.
Corporate Governance
Annual Report 2025 14
RISK MANAGEMENT AND INTERNAL CONTROL
Managing risk related to the group's financial performance is
controlled by our CFO. The Board of Directors receives monthly
financial reports from the finance department, including key fi-
nancial and operational performance indicators. The Company
presents interim management statements for Q1, Q3, and Q4
and a half-year report per IAS 34 to the market.
DATA ETHICS POLICY
In compliance with the requirements under section 99(d) of the
Danish Financial Statements Act, Napatech has implemented a
data ethics policy. Napatech complies with both Danish and EU
laws on data and privacy protection, and we recognize that
thoughtful and responsible decision-making guided by internal
policies can be needed as laws and regulations sometimes do not
necessarily provide clear ethical guidance.
Napatech wants to be perceived as a respected, competent, and
proper business partner who complies with current legislation
and follows developments in good data ethics. We aspire to treat
all the data we produce as part of our daily operations ethically
and responsibly, and our approach to the handling of data is
based on three key principles: trust, integrity, and security.
Napatech uses and processes data, both nonpersonal data and
personal data. We collect data regarding Napatech employees
for administrative purposes and contact details on customers
and their employees so we can deliver our consultancy services.
We also collect data from our webpage mainly for marketing
purposes and data directly from our customers when we create
customer accounts in our systems.
To earn the trust of our customers, employees, and sharehold-
ers, we process all data with the utmost respect for the sensitiv-
ity of the data and any privacy rights. We do not buy or sell cus-
tomer data to third parties, and we do not use artificial intelli-
gence and machine learning in the analysis of any data. Making
sure that our processing activities and security measures match
the requirements for the data we are handling, we always apply
our standards for data ethics to the way we work, whether we
process personal data or other types of data.
Corporate Social Responsibility
Annual Report 2025 15
CORPORATE SOCIAL
RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
In 2025, Napatech continued its efforts around the ESG develop-
ment initiative. Napatech has taken the first steps towards the
sustainability reporting requirements, including the EU Corpo-
rate Sustainability Reporting Directive (CSRD) and the European
Sustainability Reporting Standards (ESRS) that underpin it.
Reporting on the CSRD is a significant undertaking, and while Na-
patech is not legally obligated to report on CSRD, we have cho-
sen to proactively enhance our sustainability reporting with
some of the elements deemed relevant. The sustainability state-
ment is prepared with reference to the ESRS. We have aimed to
implement the key principles of the standards and to align them
as closely as possible with the other sections of our annual re-
port, demonstrating our steadfast commitment to sustainability.
Our CSR reporting for 2025 regarding section 99a of the Danish
Financial Statements Act on corporate social responsibility
stated below is therefore based on the material topics deter-
mined by the ESRS guidelines.
NAPATECH BUSINESS MODEL & VALUE CHAIN
Napatech's business model centers on developing and selling
high-performance, programmable network interface cards and
software for programmable NICs. Production of the hardware is
outsourced to a contract manufacturer. This model is designed
to ensure efficiency and sustainability across our value chain,
from product development to customer service.
Napatech's solutions consist of three main components:
• The hardware devices.
• The software drivers and tools are software components that
enable the integration of Napatech's programmable NICs with
various applications and platforms.
• Professional services, such as engineering consulting, extended
warranties, and support services.
Napatech's strategy is to leverage its core competencies in net-
work acceleration technology and innovation and to expand its
market presence and customer base in emerging markets.
Napatech's strategic objectives are to:
• Grow its revenue and profitability by increasing its market share,
diversifying its product portfolio, and enhancing customer loy-
alty and satisfaction.
• Strengthen its competitive advantage by investing in research
and development and collaborating with strategic partners.
• Enhance its sustainability performance by minimizing its envi-
ronmental footprint, promoting social responsibility and ethical
conduct, and engaging with its stakeholders and communities.
Napatech's value chain consists of the following main activities:
• Research and development: designing, developing, and testing
programmable network interface cards and software for pro-
grammable NICs.
• Procurement: sourcing components and services from suppliers.
• Manufacturing: outsourced assembly, testing, and quality con-
trol of Napatech's smart NICs.
• Distribution: outsourced storage, packaging, and delivery of Na-
patech's products to customers.
• Sales and Marketing: promotion, pricing, and selling Napatech's
products and services to customers through direct and indirect
channels.
• Support: troubleshooting Napatech's products and supporting
customers.
DOUBLE MATERIALITY ASSESSMENT
The starting point for Napatech’s sustainability reporting is the
materiality assessment performed by our management and
Board of Directors. As a key element of our work to prepare for
CSRD reporting, we have conducted a double materiality assess-
ment following the ideas of the ESRS guidelines.
We have assessed how we affect the environment and society
(impact materiality) and how sustainability issues can affect us
financially (financial materiality). All evaluated impacts and risks
are linked to their corresponding topical ESRS standard. The top-
ic's highest-scored impact or risk decides the position in our dou-
ble materiality matrix. We based our value chain assessments on
internal knowledge and mostly looked at our first-tier suppliers.
In our impact assessment, we considered both positive and neg-
ative effects and current and future effects related to sustaina-
bility. In our financial assessment, we measured possible sustain-
ability-related risks that could have a negative financial impact
on our business. We applied the ESRS guidance and used three
criteria of 'scale', 'scope', and 'irremediable character' to assess
the 'severity' of our actual impacts. Due to the complexity of as-
signing exact values for possible sustainability risk scenarios, we
have primarily used qualitative assessments to evaluate the per-
ceived risks when scoring them.
The materiality threshold, set by our Board of Directors, is 'sig-
nificant'. This means that impacts and risks perceived as 'signifi-
cant' or higher, and the ESRS topic related to them, are consid-
ered material.
MATERIAL ESRS TOPICS IN NAPATECH
Our preliminary scoring of each ESRS topic highlights that the
most important sustainability matters for Napatech are E1, E2,
S1, S2, S4, and G1.
Corporate Social Responsibility
Annual Report 2025 16
ESRS STANDARD: ESRS E1 CLIMATE CHANGE
Napatech is committed to conducting business operations in an
environmentally responsible manner. Our strategy focuses on
reducing emissions through energy efficiency, engaging with
suppliers to lower our overall carbon footprint, and increasing
the use of renewable energy.
Napatech is using the Climate Compass provided by the Danish
Business Authority to calculate its energy consumption and
greenhouse gas emissions. Our ambition is to reduce our carbon
intensity. In 2025, efforts have mainly been focused on getting
an overview of emissions. In 2026, further work with the Climate
Compass is needed to increase our knowledge of the mechanism
involved, set a specific target for reducing our carbon intensity
and develop an implementation plan to achieve our target.
Most emissions are scope three emissions. Emissions in scope
two relate to electricity and heating, while emissions in scope
one relates to the company car fleet. The only greenhouse gas
emission that Napatech has and accounts for is carbon dioxide.
Most scope three emissions are related to consultants and IT as-
sets used for research and development activities, and the use
of Napatech’s sold products by the customers. As a global com-
pany, our business activities include travel, which impacts the
environment.
Napatech is looking into different ways to improve our energy
efficiency and will consider getting more of our electricity from
renewable sources. In the office, Napatech recycles plastic,
shredded paper, and printer cartridges to minimize the environ-
mental effects of the production hereof. We aim to minimize our
travel activities by using virtual meetings whenever possible.
ESRS STANDARD: ESRS E2 POLLUTION
Napatech is committed to conducting business operations in an
environmentally responsible manner. We must take responsibil-
ity, mitigate potential risks, and install countermeasures. We
provide green solutions in the form of energy-efficient products
that save on data center power consumption, and we strive for
products to be recycled or disposed of safely.
Napatech has a Conflict Mineral policy with the objective of only
using tin, tantalum, tungsten, and gold (3TG) that originate from
conflict-free sources. We require all of our suppliers to provide
reports on the use and sourcing of conflict minerals in products
they supply to Napatech. The information acquired from the re-
ports is screened against the Responsible Minerals Initiative's
smelter database, and corrective steps are taken when needed.
The screening and data collection procedure is outsourced to
Greensoft. Since 2018, all our products have been 100% conflict-
free. Our commitment to achieving 100% conflict-free products
is supported by our membership in the Responsible Minerals In-
itiative.
Napatech has contracted with Greensoft Technology to collect
material information on the components from our suppliers.
Greensoft Technology contacts our suppliers and requests Full
Material Disclosures for each component, when possible, and if
not, declarations of compliance with the following industry
standards and environmental requirements:
• RoHS-2 per EU Directive of 2011/65/EU and EU Directive of
2015/863/EU.
• REACH SVHC per EU Regulation EC/1907/2006 and ECHA’s up-
dated Candidate List.
• REACH Annex-17 per EU Regulation EC/1907/2006.
• Substances of Concern In Products (SCIP) and the SCIP database
reference number – per EU Waste Framework Directive
2008/98/EC, including its amendments Directive (EU) 2018/851
and Regulation (EU) 2023/1542.
• EU Persistent Organic Pollutants (EU POPs) per EU Regulation EU
2019/1021.
• Ozone Depleting Substances (ODS) per Regulation (EU) No
2024/590.
• Persistent, Bioaccumulative, and Toxic (PBT) substances as re-
stricted under US Code of Federal Regulations Title 40, part 751,
subpart E – “Regulation of Certain Chemical Substances and mix-
tures under section 6 of The Toxic Substances Control Act”
(TSCA).
• Reporting and recordkeeping requirements for Perfluoroalkyl
and Polyfluoroalkyl Substances (PFAS) under Section 8(a)(7) of
the Toxic Substances Control Act (TSCA).
• Environmental Requirements per IBM Engineering Specification
46G3772.
To reduce the negative impact of waste materials on the envi-
ronment and to protect human health, Napatech provides infor-
mation to the European SCIP database about hazardous sub-
stances in our products. This information enables proper han-
dling, recycling, and disposal of products containing hazardous
substances and informs consumers about the presence of such
substances.
Reporting on our compliance with various restrictions on sub-
stances under regulatory requirements such as RoHS,
REACH/SVHC, POPs, ODS, TSCA-PBT, TSCA-PFAS, and others,
along with our sourcing of conflict minerals is a testament to our
commitment to the environment and ethical responsibility.
As a manufacturing company, there is a risk that producing and
delivering products to our customers will impact the environ-
ment. We work actively to limit adverse impacts that we cause
or contribute to or that we are directly linked to through our
business relationships. Napatech also supports and promotes
environmental concerns with suppliers to help them conduct
manufacturing activities in an environmentally safe and respon-
sible manner.
Our products are assembled by a contract manufacturer who
shares our ambitions for social responsibility. We investigate
each component regularly, as declared in our conformance dec-
larations. By adhering to regulatory rules and guidelines, Na-
patech ensures that its products are free from specific hazardous
Corporate Social Responsibility
Annual Report 2025 17
substances that can cause significant harm to the environment
and human health. When improperly disposed of, these sub-
stances can pollute our land, air, and water, posing serious envi-
ronmental challenges. Furthermore, Napatech’s conformance
with environmental regulations is a testament to our commit-
ment to environmental responsibility. For example, the REACH
regulation is designed to protect human health and the environ-
ment from potential risks posed by chemicals. By complying with
REACH, we ensure that the substances we use during manufac-
turing and in our products for the market are safe for both hu-
mans and the environment.
Furthermore, we work closely with our contract manufacturer in
the US to improve their environmental performance through
more efficient resource use and waste reduction. On our re-
quest, our contract manufacturer is ISO 14001 certified. During
2024, we continued discussing the initiatives under their envi-
ronmental management system with our contract manufacturer
to evaluate the effectiveness of the processes.
All our products are investigated and analyzed to comply with
rules for substances and minerals. The following declarations ap-
ply to all Napatech products:
• RoHS Declaration of Compliance
• REACH Declaration of Compliance
• EU Declaration of Conformity
We ensure that our products meet electromagnetic compatibil-
ity requirements. Accredited third parties verify all our products
for electromagnetic compliance with international EMC stand-
ards. The declaration and report below cover all Napatech prod-
ucts:
• EU Declaration of Conformity
• EMC Test Reports
Napatech has a regulatory compliance manager whose full-time
job is to ensure that Napatech and our suppliers comply with the
various legal requirements and certain ethical standards.
ESRS STANDARD: ESRS S1 OWN WORKFORCE
Napatech is committed to fostering a supportive and inclusive
workplace. Napatech has a diversification strategy and employs
more than 10 different nationalities. Salaries, positions, and du-
ties are determined based on qualifications and experience. Our
strategy promotes employee well-being, enhances diversity and
inclusion, provides ongoing training and development, and en-
sures fair labor practices.
Napatech adheres to national regulations on health, working en-
vironment, and safety. In Denmark, this includes regular inspec-
tions from the Danish Working Environment Authority, and Na-
patech has been awarded a 'green smiley' indicating that the
company's work environment is satisfactory. In the US, Napatech
provides a safe working environment following general guide-
lines from the Federal Occupational Safety and Health Admin-
istration (OSHA) and carries Worker's Compensation Insurance.
At Napatech, the Board regularly reviews overall results and
plans for health, environment, and safety. In 2025, Napatech
continued its focus on developing and retaining employees via
structured Employee Development Interviews and increased the
number of one-on-one employee satisfaction interviews. Em-
ployee satisfaction surveys are carried out every third year as
part of the mandatory health and safety risk assessment.
Our latest employee satisfaction survey from 2025 placed us well
above the benchmark level overall. We detected ergonomics
within the working environment as a focus area and a visit from
an external provider has already been planned for Q1 2026 to
help address it. All employees are offered counseling to prevent
injuries due to sedentary computer work.
In 2025, Napatech continued our focus on the physical working
environment. There are policies in place around stress and har-
assment to ensure a healthy and safe working environment
where employees can thrive and feel secure. This is for preven-
tative reasons and contributes to a good tone of communication.
Napatech was 82 full-time employees, as of December 31st,
2025, including seven women (9%), compared to eight (9%) in
2024. In general, Napatech wants to increase the presence of
women throughout the organization. Our efforts are focused on
improving work-life balance as one way to attract more female
applicants. It is, however, always the candidate who is deemed
best suited for a position that will be offered the position. It has
been difficult to raise the presence of women in the organization
as women are significantly underrepresented in the workforce
the group is recruiting within.
The supreme governing board in Napatech consists of the Board
of Directors, which, on December 31, 2025, included four men
and two women (33%). In 2025, One female and one male mem-
ber left the board. Two new female bord members were elected
and one new male board member was elected, thereby increas-
ing the representation of women.
ESRS STANDARD: ESRS S2 WORKERS IN THE VALUE CHAIN
Napatech is committed to ensuring fair labor practices and pro-
tecting human rights throughout our supply chain. Our strategy
focuses on promoting ethical labor practices and enhancing
health and safety for workers in our value chain. We have imple-
mented a supplier code of conduct that outlines our expecta-
tions for fair labor practices and human rights protections. Our
human rights due diligence process includes regular supplier au-
dits and assessments to ensure compliance. We assess risks re-
lated to workers in our value chain when our sourcing depart-
ment engages with our supplier in our regular supplier meetings.
Additionally, we support initiatives to improve working condi-
tions and provide training for workers in our supply chain. In
2025, our sourcing department discussed the approach to hu-
man rights with both Asian, European, and American suppliers
on multiple different occasions.
Napatech complies with The Responsible Business Alliance
(RBA), formerly the Electronic Industry Citizenship Coalition
(EICC), Code of Conduct that establishes standards to ensure
that working conditions in the electronics industry, or industries
in which electronics is a key component, and its supply chains
are safe, that workers are treated with respect and dignity, and
that business operations are environmentally responsible and
conducted ethically. The Napatech RBA (EICC) conformance
statement is available upon request through the company web-
site.
Corporate Social Responsibility
Annual Report 2025 18
ESRS STANDARD: ESRS S4 CONSUMERS AND END-USERS
Napatech is committed to ensuring the safety and satisfaction of
our consumers and end-users. Our strategy focuses on maintain-
ing high product safety standards and improving customer satis-
faction.
Our products' safety is ensured by accredited third parties. The
following declarations, certificates, and reports apply to all Na-
patech products:
• EU Declaration of Conformity
• IEC CB Safety Certificates
• UL Safety Certificates
• IEC CB Safety Test Reports
• UL Safety Test Reports
Our products comply with EU directives and carry the CE mark,
as declared in our EU declaration of conformity. The CE mark is
a certification mark that indicates a product’s compliance with
essential health and safety requirements set forth by EU direc-
tives. They also hold the UL mark for recognized components.
The UL Mark is a certification mark issued by UL Solutions. It sig-
nifies that a product has been certified to meet scientific safety,
quality, or security standards. They are manufactured under UL's
inspection and follow-up service, ensuring that safety-critical
components are authenticated and handled according to UL's
procedures. We regularly assess risks related to consumers and
end-users, focusing on product liability and changing consumer
preferences. We also identify opportunities to innovate and of-
fer superior products and services that meet consumer needs.
ESRS STANDARD: ESRS G1 GOVERNANCE
Napatech's governance practices include regular board meet-
ings, transparent decision-making processes, and active stake-
holder engagement. Our code of conduct outlines our commit-
ment to ethical business practices, anti-corruption measures,
and conflict-of-interest policies.
Anti-corruption
Napatech will conduct its business openly, honestly, and ethi-
cally. We commit to being open and transparent about our busi-
ness activities and will not participate in or support any form of
bribery, corruption, or fraudulent practices. Our code of conduct
outlines our anti-corruption policies, including zero tolerance for
bribery and corruption.
Our sales and operations teams are regularly reminded of our
position on anti-corruption, including recognizing and reporting
any suspected corrupt practices and emphasizing our zero-toler-
ance policy to the teams. In addition, a double-check reviewed
process of all expense claims from the sales team is in place. Fur-
thermore, a whistleblower hotline is implemented to report un-
ethical behavior.
No incidents of non-compliance or ethical breaches have oc-
curred in the company's history until now. Our code of conduct
is regularly reviewed to reflect best practices and regulatory re-
quirements.
Napatech's Corporate Social Responsibility policy is available at
www.napatech.com/investor-relations/corporate-governance.
Shareholder Information
Annual Report 2025 19
SHAREHOLDER INFORMATION
The group has a policy of continuously keeping shareholders, employees,
and other stakeholders updated on the group’s operations.
At the end of 2025, the Company had a total of 110,138,565
shares outstanding of a nominal value of DKK 0.25 each. The
company owned 63,854 treasury shares at year-end. The
company had 3,258 shareholders, and 43% of the shares were
registered outside Norway. The total outstanding warrants at
the end of the year were 5,073,353, with an average exercise
price of DKK 9.22. Napatech has one class of shares and no
restriction on the trading of the Company’s shares.
The group has a policy of continuously keeping shareholders,
employees, and other stakeholders updated on the group’s
operations. This is achieved via open quarterly presentations,
stakeholder meetings, and continuously updating the investor
relations page on www.napatech.com.
Napatech is a Danish company registered in the Danish Central
Business Register under 10109124. The ISIN number is
DK0060520450, and the Company trades on the Oslo Stock
Exchange under the ticker NAPA.
During 2025, several releases have been announced on the Oslo
Stock market under the ticker NAPA. For a complete overview,
please see www.newsweb.oslobors.no.
The Company’s financial calendar for the remainder of 2026 is as
follows:
NAPATECH HAD BY 1ST MARCH 2026 THE FOLLOWING
TOP 20 SHAREHOLDERS
Date
Activity
April 23
Annual General Meeting
May 7
Q1 2026 Interim Management Statement
August 27
Half-yearly Report
November 5
Q3 2026 Interim Management Statement
NAPATECH SHARE PRICE DEVELOPMENT 2025 (in NOK)
40
35
30
25
20
15
10
5
0
jan 2025 apr 2025 jun 2025 sep 2025 dec 2025
Investor
Number of
shares
% of
total
Country
SUNDT AS
18,257,427
16.56%
NO
VERDANE CAPITAL VIII
10,013,618
9.08%
DK
ARBEJDSMARKEDETS TILLAEGSPENSION
7,800,000
7.08%
DK
LUDVIG LORENTZEN AS
6,763,890
6.14%
NO
BROWNSKE BEVEGELSER AS
4,230,483
3.84%
NO
DNB BANK ASA
4,061,460
3.68%
NO
BANK PICTET & CIE (EUROPE) AG
3,474,161
3.15%
LUX
MANARA AS
2,600,000
2.36%
NO
DANSKE BANK A/S
2,326,479
2.11%
DK
BAHIA AS
2,120,280
1.92%
NO
PRIVATE INVESTOR
2,000,000
1.81%
NO
SKANDINAVISKA ENSKILDA BANKEN AB
1,919,712
1.74%
SE
AREPO AS
1,915,200
1.74%
NO
THE BANK OF NEW YORK MELLON
1,879,749
1.71%
UK
FOLKETRYGDFONDET
1,452,701
1.32%
NO
NORDNET BANK AB
1,416,007
1.28%
SE
MP PENSJON PK
1,391,347
1.26%
NO
SKANDINAVISKA ENSKILDA BANKEN AB
1,125,673
1.02%
LUX
J.P. MORGAN SE
1,051,216
0.95%
SE
F2 FUNDS AS
1,045,000
0.95%
NO
Total number owned by top 20
76,844,403
69.72%
Total 1,790 other shareholders
33,379,263
30.28%
Total Number of shares
110,223,666
100%
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Financial Statements
Annual Report 2025 21
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2025
Note
4
4
5, 7
8
9
10
11
12
13
In DKK'000
2025
2024
Revenue
146,609
116,408
Cost of goods sold
(44,733)
(37,049)
Gross profit
101,876
79,359
Staff costs
(111,572)
(104,994)
Other external costs
(48,906)
(60,618)
Operating profit before depreciation, amortization and impairment (EBITDA)
(58,602)
(86,253)
Depreciation, amortization and impairment
(22,132)
(29,326)
Operating result (EBIT)
(80,734)
(115,579)
Finance income
1,069
2,315
Finance costs
(5,454)
(3,823)
Result before tax
(85,119)
(117,087)
Income tax
4,464
5,830
Result for the year
(80,655)
(111,257)
Earnings per share:
Basic, DKK
(0.76)
(1.15)
Diluted, DKK
(0.76)
(1.15)
Consolidated Financial Statements
Annual Report 2025 22
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2025
Note
DKK'000
2025
2024
Result for the year
(80,655)
(111,257)
Other comprehensive income that may be reclassified to profit and loss in
subsequent periods:
Exchange differences on translation of foreign operations
(1,940)
824
Net other income / (loss) that may be reclassified to profit or loss in subsequent
periods
(1,940)
824
Total other comprehensive income / (loss) for the year, net of tax
(1,940)
824
Total comprehensive income / (loss) for the year, net of tax
(82,595)
(110,433)
Consolidated Financial Statements
Annual Report 2025 23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2025
ASSETS
Note
14
15
16
15
22
18
19, 22
19, 22
20
22
In DKK'000
2025
2024
Development projects, completed
6,910
19,764
Development projects, in progress
9,226
4,269
Patents
691
1,042
Intangible assets
16,827
25,075
Plant and equipment
3,401
4,765
Right-of-use assets
6,180
9,200
Leasehold improvements
404
441
Tangible assets
9,985
14,406
Leasehold deposits
1,636
1,587
Other non-current assets
1,636
1,587
Non-current assets
28,448
41,068
Inventories
56,678
69,876
Trade receivables
37,733
19,381
Prepayments
4,446
5,153
Other receivables
12,350
23,762
Income tax receivable
4,830
6,345
Cash and cash equivalents
127,470
64,341
Current assets
243,507
188,858
Total assets
271,955
229,926
Consolidated Financial Statements
Annual Report 2025 24
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2025
EQUITY AND LIABILITIES
Note
21
21
21
21
22, 24
22, 24
16, 24
23
22, 24
16, 24
22
23
In DKK'000
2025
2024
Share capital
27,535
24,999
Share premium
606,871
483,062
Treasury shares
(619)
(619)
Foreign currency translation reserve
(1,387)
553
Share-based payment reserve
25,120
18,946
Retained earnings
(452,827)
(373,518)
Equity
204,693
153,423
Interest-bearing loans and borrow ings
4,678
6,806
Other financial liabilities
4,652
4,540
Lease liabilities
3,349
6,406
Contract liabilities
1,344
1,550
Non-current liabilities
14,023
19,302
Interest-bearing loans and borrow ings
23,374
36,098
Lease liabilities
3,211
3,124
Trade payables
8,109
5,789
Other payables
12,712
8,953
Contract liabilities
5,833
3,237
Current liabilities
53,239
57,201
Total liabilities
67,262
76,503
Total equity and liabilities
271,955
229,926
Consolidated Financial Statements
Annual Report 2025 25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2025
Foreign
currency
Share
based
Share
Share
Treasury
translation
paym ent
Retained
Total
Note
In DKK'000
capital
premium
shares
reserve
reserve
earnings
equity
At 1 January 2024
22,544
343,064
(2,110)
(271)
10,707
(262,224)
111,710
Result for the year
-
-
-
-
-
(111,257)
(111,257)
Total other comprehensive income
-
-
-
824
-
-
824
Total comprehensive income
-
-
-
824
-
(111,257)
(110,433)
Issue of shares
2,455
143,117
-
-
-
-
145,572
Transaction costs
-
(5,382)
-
-
-
-
(5,382)
Increase (decrease) through treasury share
transactions
-
-
1,491
-
-
-
1,491
Reversal, exercised and lapsed share options
-
2,263
-
-
(2,660)
(37)
(434)
7
Share-based payments
-
-
-
-
10,899
-
10,899
Total transactions w ith shareholders
2,455
139,998
1,491
-
8,239
(37)
152,146
At 31 Decem ber 2024
24,999
483,062
(619)
553
18,946
(373,518)
153,423
Result for the year
-
-
-
-
-
(80,655)
(80,655)
Total other comprehensive income
-
-
-
(1,940)
-
-
(1,940)
Total comprehensive income
-
-
-
(1,940)
-
(80,655)
(82,595)
Issue of shares
2,536
128,188
-
-
-
-
130,724
Transaction costs
-
(4,954)
-
-
-
-
(4,954)
Reversal, exercised and lapsed share options
-
575
-
-
(1,921)
1,346
-
7
Share-based payments
-
-
-
-
8,095
-
8,095
Total transactions w ith shareholders
2,536
123,809
-
-
6,174
1,346
133,865
At 31 Decem ber 2025
27,535
606,871
(619)
(1,387)
25,120
(452,827)
204,693
Consolidated Financial Statements
Annual Report 2025 26
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2025
Note
In DKK'000
2025
2024
Operating activities
Result bef ore tax
(85,119)
(117,087)
Adjustments to reconcile profit before tax to net cash flows:
Finance income
(1,069)
(2,315)
Finance costs
5,454
3,823
Depreciation, amortization and impairment
22,132
29,326
Share-based payment expense
8,095
10,899
Working capital adjustments:
Change in inventories
13,198
(34,304)
Change in trade and other receivables and prepayments
(9,335)
9,829
Change in trade and other payables and contract liabilities
8,447
(6,866)
Interest received
1,069
1,617
Interest paid
(1,794)
(3,135)
Income tax received, net
5,979
5,372
Net cash flow s from operating activities
(32,943)
(102,841)
Investing activities
Purchase of tangible assets
(1,157)
(4,432)
Investments in intangible assets
(8,081)
(6,665)
Investments in leasehold deposits
(49)
(46)
Net cash from investing activities
(9,287)
(11,143)
Free cash flow
(42,230)
(113,984)
Financing activities
Capital increase
130,724
145,572
Payments regarding share options
-
(246)
Transaction costs on issue of shares
(4,954)
(5,382)
Increase (decrease) through treasury share transactions
-
1,491
Repayment of financial lease liabilities
(3,199)
(3,561)
Repayment of borrow ings
(14,838)
(1,175)
Net cash flow s from financing activities
107,733
136,699
Net change in cash and cash equivalents
65,503
22,715
Net foreign exchange difference
(2,374)
(741)
Cash and cash equivalents at 1 January
64,341
42,367
Cash and cash equivalents at 31 Decem ber
127,470
64,341
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 CORPORATE INFORMATION ............................................................................................................................................. 28
NOTE 2 MATERIAL ACCOUNTING POLICY INFORMATION .......................................................................................................... 28
NOTE 3 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES, AND ASSUMPTIONS .......................................................... 34
NOTE 4 OPERATING SEGMENTS .................................................................................................................................................... 34
NOTE 5 STAFF COSTS ..................................................................................................................................................................... 36
NOTE 6 RESEARCH AND DEVELOPMENT COSTS ........................................................................................................................ 36
NOTE 7 SHARE-BASED PAYMENTS ............................................................................................................................................... 36
NOTE 8 AUDITORS' FEE ................................................................................................................................................................... 41
NOTE 9 DEPRECIATION, AMORTIZATION AND IMPAIRMENT ...................................................................................................... 41
NOTE 10 FINANCE INCOME ............................................................................................................................................................... 41
NOTE 11 FINANCE COSTS ................................................................................................................................................................. 42
NOTE 12 INCOME TAX ........................................................................................................................................................................ 42
NOTE 13 EARNINGS PER SHARE ..................................................................................................................................................... 43
NOTE 14 INTANGIBLE ASSETS ......................................................................................................................................................... 43
NOTE 15 TANGIBLE ASSETS ............................................................................................................................................................. 44
NOTE 16 LEASING .............................................................................................................................................................................. 45
NOTE 17 DEFERRED TAX .................................................................................................................................................................. 46
NOTE 18 INVENTORIES ...................................................................................................................................................................... 46
NOTE 19 TRADE AND OTHER RECEIVABLES.................................................................................................................................. 47
NOTE 20 INCOME TAX RECEIVABLES .............................................................................................................................................. 47
NOTE 21 ISSUED CAPITAL AND RESERVES ................................................................................................................................... 47
NOTE 22 FINANCIAL ASSETS AND FINANCIAL LIABILITIES ........................................................................................................... 49
NOTE 23 CONTRACT LIABILITIES ..................................................................................................................................................... 49
NOTE 24 LIABILITIES FROM FINANCING ACTIVITIES ..................................................................................................................... 50
NOTE 25 COMMITMENTS AND CONTINGENCIES ........................................................................................................................... 50
NOTE 26 RELATED PARTY DISCLOSURES ...................................................................................................................................... 50
NOTE 27 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES ...................................................................................... 51
NOTE 28 EVENTS AFTER THE REPORTING PERIOD ..................................................................................................................... 54
Consolidated Financial Statements
Annual Report 2025 28
NOTE 1 CORPORATE INFORMATION
The consolidated financial statements of Napatech A/S and its subsidiary (collectively, the Group) for the year ended were authorized
for issue in accordance with the resolution of the management on March 19, 2026.
ESEF data
Name of reporting entity or other means of identification
Napatech A/S
Domicile of entity
Denmark
Description of nature of entity's operations and principal activities
Tech company
Country of incorporation
Denmark
Principal place of business
Global
Legal form of entity
A/S
Address of entity's registered office
Tobaksvejen 23A,
2860 Soeborg
NOTE 2 MATERIAL ACCOUNTING POLICY INFORMATION
General
The financial statements have been prepared in accordance with IFRS Accounting Standards, as adopted by the EU and additional
requirements in the Danish Financial Statement Act.
The consolidated financial statements are prepared on a historical cost basis.
The consolidated financial statements are presented in thousands of Danish kroner (DKK'000).
Changes in accounting policies
The accounting policies are consistent with those applied to the consolidated financial statements for 2024.
New and amended standards and interpretations that have become operative
All new or amended standards (IFRS) and interpretations (IFRIC) as adopted by the EU and which are effective for the financial year
beginning on 1 January 2025 have been adopted. The implementation of these new or amended standards and interpretations had no
material impact on the financial statements. For standards implemented prospectively, the comparative figures are not restated.
New financial reporting standards not yet adopted
Certain new accounting standards and interpretations have been published that are not yet in effect or endorsed by the EU and,
therefore, not relevant for the preparation of 2025 consolidated financial statements. The Group expects to implement these standards
as they take effect. These standards are not expected to have a material impact on the entity in the current or future reporting periods
and on foreseeable future transactions besides from IFRS 18, which replaces IAS 1 effective from 1 January 2027.
IFRS 18 will affect the presentation of the income statement. It will mainly affect the classification of ‘financial income’ and ‘financial
expenses’, which will be divided into three new line items: 'operating financial income and expenses', 'investment income' and 'interest
expenses'. The reclassification will result in a difference between IAS 1 operating profit and the IFRS-18 defined operating profit, which
under IFRS18 will include operating foreign exchange rate differences in the operating profit.
iXBRL reporting
Napatech A/S has filed the Annual Report for 2025 in the European Single Electronic Format (ESEF), XHTML format, that can be displayed
in a standard browser. The primary statements and notes in the consolidated financial statements are tagged using eXtensible Business
Reporting Language (iXBRL), which complies with the ESEF taxonomy included in the ESEF Regulation.
The consolidated financial statements
The consolidated financial statements comprise the parent company, Napatech A/S, and its subsidiary. The subsidiary is fully consolidated
from the date of acquisition and/or incorporation, being the date on which the parent company obtains control until the date when such
control ceases. The financial statements of the subsidiary are prepared for the same reporting period as the parent company's financial
statements, using consistent accounting policies. The consolidated financial statements are prepared as a consolidation of the parent
company's and the subsidiary’s financial statements, eliminating all intragroup balances, transactions, unrealized gains and losses, and
dividends.
Consolidated Financial Statements
Annual Report 2025 29
NOTE 2 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
Currency translation
For each group entity, a functional currency is determined, and items recognized in the financial statements of the individual entities are
measured using that functional currency. The functional currency is the currency used as the primary currency for the activities of the
reporting entity. Transactions denominated in currencies other than the functional currency are considered transactions denominated
in foreign currencies.
On initial recognition, transactions denominated in foreign currencies are translated into the functional currency at the exchange rates
at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment
are recognized in the income statement as financial income or financial expenses.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates at the
reporting date. Any exchange difference arising from the translation is recognized in the income statement as financial income or financial
expenses. Non-monetary assets and liabilities measured in terms of historical cost in a foreign currency are translated using the exchange
rates at the date of the initial transaction.
Translation of group entities
On recognition in the consolidated financial statements of foreign entities with a functional currency different from the parent company's
presentation currency (DKK), the income statement and the statement of cash flows are translated at the exchange rates at the
transaction date, while the statement of financial position items is translated at the exchange rates at the reporting date. Any foreign
exchange differences arising from the translation are recognized as other comprehensive income in a separate reserve. On full or partial
disposal of a foreign entity, the share of the currency reserve relating to that particular foreign entity is recognized in the income
statement.
Revenue
Sales of goods
The Group manufactures and sells network adapters, including software, to end-users and through third-party channel partners. The
Group's sales contracts regarding network adapters do not include installation services or significant customization etc., and each sales
transaction only relates to a single performance obligation.
Revenue from contracts with customers is recognized in the income statement at the point in time when control of the goods is
transferred to the customer, usually on delivery of the goods, and at an amount that reflects the consideration to which the Group
expects to be entitled in exchange for these goods. Revenue is measured at the fair value of the consideration received, excluding rebates
and VAT.
Sales of services
Extended warranties and technical product support regarding the network adapters are sold separately. The Group also provides specific
engineering services according to separate contracts with customers.
The revenue from engineering service contracts is recognized in the income statement based on the stage of completion (over time).
Contract liabilities associated with engineering services are recognized as revenue in the income statement based on the stage of
completion (over time), which is determined on the basis of the relationship between the Group’s resources in relation to the recent
total estimate of resource consumption. The degree of completion is assessed regularly, and the projects are closely monitored by
management, and further adjustments are made to the stage of completion if deemed necessary. When performing this evaluation, all
factors concerning the relevant contract are taken into consideration and assessed appropriately. Contract liabilities associated with
extended warranties and technical product support are recognized as revenue in the income statement divided equally over the period
stated in the contract, and the costs associated with providing the extended warranties and technical product support are recognized as
they are incurred.
The Group applies the practical expedient to recognize incremental costs of obtaining a contract as they are incurred.
Cost of goods sold
Cost of goods sold is incurred to generate the period's revenue. Cost of goods sold comprises costs relating to purchases of products that
are to be resold. Cost of goods sold also includes movements in inventory write-down for the year. Cost of goods sold does not include
staff costs. The Group uses sub-suppliers for the primary production of goods for resale.
Staff costs
Staff costs include salaries, bonuses, pensions and social costs, share-based payments, vacation pay, and other benefits. Staff costs are
recognized in the year in which the associated services are rendered by the employees. Staff costs comprise all staff costs to employees
in the Group except from the portion transferred to capitalized development costs as specified in the note related to staff costs.
Consolidated Financial Statements
Annual Report 2025 30
NOTE 2 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
Share-based payments
The Group's employees and management receive consideration in the form of share-based payments. The share-based consideration is
an equity-settled program under which employees and management deliver services in return for share options. The share options are
measured at fair value at the time of granting. The fair value of share options is determined using the Black-Scholes option-pricing model.
Costs relating to equity-settled share-based payments are recognized on a straight-line-basis in the income statement under staff costs
and in equity over the vesting period. The total expense recognized for equity-settled share-based payments at the reporting date reflects
the share of the vesting period that has lapsed and management's best estimate of the number of equity instruments that will ultimately
vest.
Other external costs
Other external costs comprise costs of research and development not qualifying for recognition as intangible assets, and costs of
development associated with engineering service contracts. Other external costs also comprise costs of sales, including costs of sales
campaigns, advertising, exhibitions, etc., and administration costs, including office-related expenses. Write-downs on trade receivables
are also included.
Finance income and cost
Finance income and costs comprise interest income and expenses, unrealized exchange gains and losses on financial assets and liabilities
in foreign currencies and realized exchange gains and losses on foreign currency transactions.
For financial instruments measured at amortized cost, interest income, and expenses are recognized using the effective interest rate
method.
Income tax for the year
Tax for the year, which comprises the current tax charge for the year and changes in the deferred tax charge, including changes arising
from changes in the tax rate, is recognized in the income statement as regards the portion that relates to the profit or loss for the year
and in other comprehensive income as regards the portion that relates to entries in other comprehensive income. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively enacted by the reporting date in the countries where the
Group operates and generates taxable income.
Intangible assets
Intangible assets are initially recognized in the statement of financial position at cost. Subsequent to initial recognition, intangible assets
are carried at cost less accumulated amortization and impairment losses.
Intangible assets comprise development projects and patents with finite useful lives.
Intangible assets with finite useful lives are amortized over their economic lives and tested for impairment whenever there is an
indication that an asset might be impaired. Useful lives are reassessed on an annual basis. Changes in expected useful lives are accounted
for as changes in accounting estimates. Amortization and impairment losses are recognized in the income statement.
Development projects
Research costs are recognized in the income statement as incurred. Development costs incurred for individual projects are recognized
as an intangible asset when the Group can demonstrate the following:
• The technical feasibility of completing the development project so that it will be available for use or sale;
• The intention to complete the development project and the Group's ability to use or sell it;
• The probability that the development project will generate future economic benefits;
• The availability of adequate technical, financial, and other resources to complete the development project and to use or sell it;
• The ability to measure the costs reliably.
Subsequent to the initial recognition of the development costs as an intangible asset, the development project is recognized at cost less
any accumulated amortization and impairment losses. Amortization of the intangible asset begins when the development of the asset
has been completed, and the asset is used as planned. Depreciation is provided on a straight-line basis over the expected useful lives of
the assets. The expected useful life of development projects is 3 years.
Patents
Patents are recognized as intangible assets at the time of acquisition and measured at cost less accumulated amortization. Patents are
amortized over their useful lives, starting at the time when the patent takes effect. Depreciation is provided on a straight-line basis over
the expected useful lives of the assets. The useful life of patents is estimated at 10 years.
Consolidated Financial Statements
Annual Report 2025 31
NOTE 2 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
Tangible assets
Tangible assets include plant and equipment and leasehold improvements. Items of tangible assets are measured at cost less
accumulated depreciation and impairment losses, the cost being the acquisition price and costs directly related to the acquisition until
such time when the asset is ready for use.
Depreciation is provided on a straight-line basis over the expected useful lives of the assets, as follows:
Plant and equipment 3 years
Leasehold improvements 5 years
Gains and losses on the disposal of tangible assets are determined by comparing the proceeds from disposal with the carrying amount
of the asset and are recognized in the income statement.
Residual values and useful lives are reassessed on an annual basis. Changes in useful lives or residual values are accounted for as changes
in accounting estimates.
Leases
The Group assesses at contract inception whether a contract is or contains a lease. That is if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for consideration. The Group recognizes lease liabilities to make lease
payments and right-of-use assets representing the right to use the underlying assets.
The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12
months or less from the commencement date and do not contain a purchase option or extension option). The Group also applies the
lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on
short-term leases and leases of low-value assets are recognized as expenses on a straight-line basis over the lease term.
A right-of-use asset and a lease liability are recognized in the balance sheet when the specifically identifiable asset is made available
under the lease agreement during the lease term and when the Group gains the right to virtually all the economic benefits from the use
of the identified asset and the right to control the use of the identified asset.
The Group applies the practical expedient to recognize payments related to service components in leasing contracts for plant and
equipment as part of the right-of-use asset and a lease liability.
Lease liabilities
Lease liabilities are initially measured at the present value of future lease payments to be made over the lease term. The lease payments
include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating the lease unless the Group is very unlikely to exercise
the option to terminate.
In assessing the expected lease term for property leases, the Group estimates for strategic reasons that the expected rental period is
between 3-5 years.
In calculating the present value of lease payments, the Group uses its alternative borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily determinable. The alternative borrowing rate is the cost of raising external
financing for a corresponding asset with a financing period corresponding to the term of the lease in the currency in which the lease
payments are settled.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term,
or a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an option to purchase the underlying asset.
Right-of-use assets
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs
incurred, and lease payments made at or before the commencement date, less any lease incentives received. Right-of-use assets
are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:
Properties 3-5 years
Plant and equipment 3-6 years
Consolidated Financial Statements
Annual Report 2025 32
NOTE 2 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
Impairment of non-financial assets
In-progress development projects are tested for impairment at least once a year. Other long-term assets with finite useful lives are
reviewed for impairment at each reporting date. Where indications of impairment are identified for in-progress development projects
or other long-term assets with finite useful lives, the Group estimates the recoverable amount of the asset. The recoverable amount is
determined for the individual asset or a group of assets constituting an integrated cash-generating unit. The recoverable amount is the
higher of the asset or the cash-generating unit's fair value, less costs to sell and its value in use. When the carrying amount of an asset or
a cash-generating unit exceeds its recoverable amount, the asset is considered impaired, and the carrying amount is reduced to the
recoverable amount. The impairment loss is recognized in the income statement.
The value in use is calculated as the present value of expected future cash flows from the asset or the cash-generating unit of which the
asset is a part.
Inventories
Inventories are measured at the lower of cost and net realizable value. The cost is determined using the first-in/first-out (FIFO) method.
The cost of goods for resale, raw materials, and consumables comprises the purchase price plus delivery costs. The Group uses sub-
suppliers for the primary production of goods for resale.
The net realizable value of inventories is determined as the selling price less costs of completion and costs incurred to generate the
revenue, taking into account marketability, obsolescence, and developments in the expected selling price.
Receivables
Receivables are measured at amortized cost less write-downs. Write-downs on trade receivables are based on the simplified expected
credit loss model. Credit loss allowances on individual trade receivables and other receivables are provided for when objective indications
of credit losses occur such as debtor’s bankruptcy and uncertainty about the debtor’s ability and/or willingness to pay, etc.
Write-downs on receivables are recognized in the income statement under other external costs.
Cash and cash equivalents
Cash and cash equivalents comprise cash at banks.
Equity
Share premium
Share premium is the value in excess of the nominal value of the shares that are contributed to the company upon formation or a capital
increase. The share premium is part of the distributable reserves.
Share-based payment reserve
The value of share options granted is recognized in equity under share-based payment reserve over the vesting period as the employees
deliver the relevant services. The reserve reflects the total value of share options granted based on the share of the vesting period that
has lapsed and the Group's best estimate of the number of equity instruments that will ultimately vest. The reserve is part of the
distributable reserves.
Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or loss is
recognized in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between
the carrying amount and the consideration, if reissued, is recognized in the share premium.
Foreign currency translation reserve
The foreign currency translation reserve comprises exchange differences arising upon translation of the financial statements of foreign
operations from their functional currency to the parent company's presentation currency (DKK).
Upon full or partial realization of the investment in the foreign operation, foreign exchange adjustments are recognized in the income
statement in the same item as the gain/loss from the sale. The reserve is part of the distributable reserves.
Financial liabilities
Amounts owed to banks etc., are recognized at the date of borrowing at the amount of proceeds received net of transaction costs paid.
In subsequent periods, the financial liabilities are measured at amortized cost using the effective interest method. Accordingly, the
difference between the proceeds and the nominal value is recognized in financial expenses over the term of the loan.
Non-financial liabilities are measured at net realizable value.
Consolidated Financial Statements
Annual Report 2025 33
NOTE 2 MATERIAL ACCOUNTING POLICY INFORMATION (CONTINUED)
Contract liabilities
A contract liability is recognized if a payment is received or a payment is due (whichever is earlier) from a customer before the Group
transfers the related goods or services. Contract liabilities are recognized as revenue when the Group performs under the contract.
Income tax and deferred tax
Current tax liabilities and current tax receivable are recognized in the statement of financial position as the estimated tax charge for the
period, adjusted for tax on previous years' taxable income, and tax paid on account. Income tax return receivables are evaluated with
respect to situations in which applicable tax regulations are subject to interpretation, and provisions are established where appropriate.
Deferred tax is measured, using the "balance sheet liability" method, of all temporary differences at the reporting date between the tax
base and the carrying amount of assets and liabilities. Deferred tax assets and liabilities are measured at the tax rates that are expected
to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantially enacted at the balance sheet date.
Deferred tax is recognized for all taxable, temporary differences, except for taxable, temporary differences associated with investments
in subsidiaries where the timing of the reversal of the temporary differences can be controlled, and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible, temporary differences, and all unutilized tax loss carry forward to the extent that it
is probable that taxable profit will be available against which the deductible, temporary differences, and unutilized tax loss carry forward
can be used.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are reviewed at each reporting date and are recognized to the extent that it has become probable that
future taxable profits will be available against which the deferred tax asset can be utilized.
Deferred tax assets and deferred tax liabilities relating to items recognized outside profit or loss are offset if a legally enforceable right
exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the
same taxation authority.
Statement of cash flows
The statement of cash flows shows the Group's cash flows for the year, broken down into operating, investing, and financing activities,
the period's changes in cash and cash equivalents, and the Group's cash and cash equivalents at the beginning and the end of the period.
Cash flows from operating activities are presented using the indirect method and are stated as the profit or loss for the year before tax,
adjusted for non-cash operating items, changes in working capital, paid and/or received interests, and paid and/or received income taxes.
Cash flows from investing activities comprise payments related to purchases and/or proceeds of/from non-current assets.
Cash flows from financing activities comprise dividends distributed to shareholders, capital increases and/ or reductions, repayments
and/or proceeds of/from interest-bearing debt, and payments regarding lease agreements, including instalments but excluding interest
payments.
Segment information
The segment information is provided on geographical markets and business segments.
The segmentation is based on the Group's internal financial reporting and has been prepared in accordance with the Group's accounting
policies. The Group monitors the performance of the segments to the level of gross profit. All other items of the income statement, as
well as assets and liabilities, are managed on a group basis and, therefore, not allocated to individual segments.
Income/expenses in the segments comprise the items directly attributable to the individual segments as well as the items that may be
allocated to the individual segments on a reliable basis.
Consolidated Financial Statements
Annual Report 2025 34
NOTE 3 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES, AND ASSUMPTIONS
The preparation of the consolidated financial statements requires the management to make judgments, estimates, and assumptions that
affect the reported amounts of revenues, expenses, assets, and liabilities. Significant accounting judgments, estimates, and assumptions
are presented below.
Accounting estimates and uncertainty of estimates
The valuation of certain assets and liabilities requires the management to make estimates and assumptions related to future events. The
estimates and assumptions are based on historical experience and other factors that, according to the management's assessment, are
reasonable but also inherently subject to uncertainty and unpredictability. The assumptions may be incomplete and inaccurate, and
unexpected events and/or circumstances may arise.
Furthermore, the Group is subject to risks and uncertainties that may cause the actual results to differ from these estimates, both
positively and negatively. The Group's specific risks are discussed in the relevant sections of the management's review and in the notes
to the consolidated financial statements.
The major assumptions concerning future events and other sources of estimation of uncertainties at the reporting date, which involve a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are
presented below.
Development projects
There is an ongoing assessment of whether the development costs meet the criteria for capitalization as set out in the summary of
accounting policies, note 2, and whether the development projects will generate future economic benefits.
Development projects in progress are annually tested for impairment. Completed development projects are reviewed for impairment
indicators. If there is evidence of impairment, an impairment test is carried out for the project concerned. The impairment test is prepared
on the basis of factors such as the future use of the project and the present value of expected future income, interest, and risk. The
carrying amount of completed development projects was DKK 6.9 million on December 31, 2025 (December 31, 2024: DKK 19.8 million).
The accounting judgments, estimates, and assumptions that the management makes for development projects are consistent with
previous years.
NOTE 4 OPERATING SEGMENTS
The following tables present revenue and gross profit information about the Group's operating segments for the years ended December
31, 2025, and 2024, respectively:
Geographical segments
20252024CONSOLI-CONSOLI-AMERICAS ROW AMERICASROWDKK'000DATEDDATEDRevenueTotal revenue 101,55345,056146,60980,88635,522116,408- Sales of goods94,53843,914138,45272,38934,554106,943- Sales of services7,0151,1428,1578,4979689,465Cost of goods sold(33,486)(11,247)(44,733)(29,053)(7,996)(37,049)Segment gross profit68,06733,809101,87651,83327,52679,359
Explanation abbreviations
AMERICAS = North & South America
ROW = Rest of the World
The geographical segmentation is based on the location of the customers.
In 2025, revenue from sales to customers located in Denmark amounted to 0% of total revenue (2024: 0%). The Group has material
revenue from customers located in the USA. In 2025, sales to customers in the USA accounted for 69% of total revenue (2024: 66%).
Consolidated Financial Statements
Annual Report 2025 35
NOTE 4 OPERATING SEGMENTS (CONTINUED)
Business segments
2025 2024 SMARTNIC ENGINEERING CONSOLI- SMARTNIC ENGINEERING CONSOLI- DKK'000 PRODUCTS SERVICES DATED PRODUCTS SERVICES DATED Revenue Total revenue 141,903 4,706 146,609 112,147 4,261 116,408 - Sales of goods 138,452 - 138,452 106,943 - 106,943 - Sales of services 3,451 4,706 8,157 5,204 4,261 9,465 Cost of goods sold (44,610) (123) (44,733) (36,843) (206) (37,049) Segment gross profit 97,293 4,583 101,876 75,304 4,055 79,359
Revenue from Engineering services is considered a separate segment from SmartNIC products due to the difference in economic
characteristics and the timing of recognition of revenue. The revenue from engineering service contracts is recognized in the income
statement based on the stage of completion (over time) according to IFRS 15, while the main part of the revenue from SmartNIC products
is recognized in the income statement at a point in time.
The Group monitors the performance of the segments to the level of gross profit. All other items of the income statement, as well as
assets and liabilities, are managed on a group basis and, therefore, not allocated to individual segments.
Transactions with major customers
Customers with revenue amounting to 10% or more of the total revenue of the Group is divided to segments as follows:
20252024Revenue Revenue % Revenue Revenue % GeographicalGeographicalamount of Group amount of Group segmentssegmentsDKK'000revenueDKK'000revenue1. significant customerAMERICAS31,53522%AMERICAS22,72020%- SMARTNIC products 31,53520,646-Engineering services-2,0742. significant customerAMERICAS19,70713%AMERICAS14,08512%- SMARTNIC products 19,70714,085-Engineering services--
See note 27 for Information about the customers payment terms.
Consolidated Financial Statements
Annual Report 2025 36
NOTE 5 STAFF COSTS
Employee benefits expense is reported as follows:
DKK'00020252024Wages and salaries102,15792,525Defined contribution schemes 4,5384,250Share-based payment expense (note 7) 8,09510,900Social security costs 3,3913,551Total employee benefits expense118,181111,226Transferred to capitalized development costs (6,609)(6,232)Total staff costs111,572104,994
Average number of employees
86
82
Compensation of key management personnel of the Group is as follows:
2025 2024 Executive Other Board of Executive Other Board of management management Directors management management Directors Short-term staff benefits 2,307 11,317 1,238 2,416 9,939 637 Defined contribution schemes 138 342 - 143 342 - Share-based payment expense 4,318 833 69 5,831 1,717 978 Total compensation of key management personnel 6,763 12,492 1,307 8,390 11,998 1,615
Executive management consists of the CEO, while other management consists of the CFO, COO, CMO, and CRDO.
NOTE 6 RESEARCH AND DEVELOPMENT COSTS
Research and development costs, including annual amortization and impairment of completed development projects and development
projects in progress recognized in the consolidated income statement, are DKK 94,373 thousand (2024: DKK 102,089 thousand). All
research and development costs are incurred by the parent company. The total amount of research and development costs recognized
in the balance sheet on December 31, 2025.is DKK 16,136 thousand (2024: DKK 24,033 thousand).
NOTE 7 SHARE-BASED PAYMENTS
Employees and members of the management in both the parent company and the US-based subsidiary are eligible for share option
schemes. They are granted a certain number of share options in the parent company in return for the services they provide to the Group.
Share options under these schemes are granted at fixed exercise prices. The right to share options can only be vested as long as the
holder is an employee of the Group. Members of the Board of Directors are eligible for share option schemes under corresponding terms
as long as the holder is a member of the Board of Directors of the Group.
The share-based payment expense is measured at fair value on the grant date using the Black-Scholes model. The expense is recognized
in the income statement with the counter item in the share-based payment reserve under equity, and it is recognized over (a) the period
during which the share option holder has met the vesting conditions or (b) the period in which an exercising event is likely to occur if this
period is shorter.
Consolidated Financial Statements
Annual Report 2025 37
NOTE 7 SHARE-BASED PAYMENTS (CONTINUED)
Share-based payment programs with outstanding share options on December 31, 2025
Based on the decision made by the General Assembly in April 2017 to issue 460,000 share options, the Board of Directors issued 460,000
share options in September 2018 with the nominal value of DKK 0.25 at an exercise price of NOK 5.00 (DKK 3.88). The share options'
lifetime is 8 years, where the share options holders are subject to a lock-up period in the first 2 years of the share options' lifetime. The
share options vest with 1/6 in each of the remaining 6 years of the share options' lifetime.
Based on the decision made by the General Assembly in April 2018 to issue 480,000 share options, the Board of Directors issued 319,600
share options in September 2018 with a nominal value of DKK 0.25 at an exercise price of NOK 5.00 (DKK 3.88). The share options' lifetime
is 8 years, where the share options holders are subject to a lock-up period in the first 2 years of the share options' lifetime. The share
options vest with 1/6 in each of the remaining 6 years of the share options' lifetime.
Based on the same decision made by the General Assembly in April 2018 to issue 480,000 share options, the Board of Directors issued
55,000 share options in December 2018 with the nominal value of DKK 0.25 at an exercise price of NOK 3.20 (DKK 2.45). The share
options' lifetime is 8 years, where the share options holders are subject to a lock-up period in the first 2 years of the share options'
lifetime. The share options vest with 1/6 in each of the remaining 6 years of the share options' lifetime.
The general terms for all issues based on the 2017 and 2018 share options program are summarized as follows:
Earliest exercise date 2 years from the grant date
Latest exercise date 8 years from the grant date
Based on the decision made by the General Assembly in April 2019 to issue 2,076,704 share options, the Board of Directors issued
1,736,800 share options in July 2019 with the nominal value of DKK 0.25 at an exercise price of NOK 1.50 (DKK 1.16). The share options'
lifetime is 8 years, where the share options holders are subject to a lock-up period in the first year of the share options' lifetime. The
share options vest with 1/4 in each of the following 4 years.
The general terms for all issues based on the 2019 share options program are summarized as follows:
Earliest exercise date 1 year from the grant date
Latest exercise date 8 years from the grant date
Based on the decision made by the General Assembly in April 2020 to issue 1,000,000 share options, the Board of Directors issued 995,000
share options in May 2020 with the nominal value of DKK 0.25 at an exercise price of NOK 4.18 (DKK 2.89). The share options' lifetime is
8 years, where the share options holders are subject to a lock-up period in the first year of the share options' lifetime. The share options
vest with 1/4 in each of the following 4 years.
Based on the same decision made by the General Assembly in April 2020 to issue 1,000,000 share options, the Board of Directors issued
330,000 share options in August 2023 (as some share options have reverted to the pool) with the nominal value of DKK 0.25 at an exercise
price of NOK 9.92 (DKK 6.42). The share options' lifetime is 8 years, where the share options holders are subject to a lock-up period in
the first year of the share options' lifetime. The share options vest with 1/4 in each of the following 4 years.
Based on the decision made by the General Assembly in April 2021 to issue 460,000 share options, the Board of Directors issued 40,000
share options in August 2023 with a nominal value of DKK 0.25 at an exercise price of NOK 9.92 (DKK 6.42). The share options' lifetime is
8 years, where the share options holders are subject to a lock-up period in the first year of the share options' lifetime. The share options
vest with 1/4 in each of the following 4 years.
The general terms for all issues based on the 2020 and 2021 share options program are summarized as follows:
Earliest exercise date 1 year from the grant date
Latest exercise date 8 years from the grant date
Based on the decision made by the General Assembly in April 2022 to issue 440,000 share options to members of the Board of Directors,
the Board of Directors issued 114,487 share options in June 2022 with a nominal value of DKK 0.25 at an exercise price of DKK 0.25. The
share options' lifetime is 2 years and 10 months. All the share options vest at the grant date.
Based on the same decision made by the General Assembly in April 2022 to issue 440,000 share options to members of the Board of
Directors, the Board of Directors issued 251,007 share options in June 2022 with the nominal value of DKK 0.25 at an exercise price of
DKK 0.25. The share options' lifetime is 2 years and 10 months. The share options vest with 1/10 in each of the following 10 months.
Based on the same decision made by the General Assembly in April 2022 to issue 440,000 share options to members of the Board of
Directors, the Board of Directors issued 52,924 share options in March 2024 with the nominal value of DKK 0.25 at an exercise price of
DKK 0.25. The share options' lifetime is 2 years. The share options vest within one month from the grant date. In November 2024, the
Board of Directors cancelled 18,488 of these share options.
Consolidated Financial Statements
Annual Report 2025 38
NOTE 7 SHARE-BASED PAYMENTS (CONTINUED)
Based on the same decision made by the General Assembly in April 2022 to issue 440,000 share options to members of the Board of
Directors, the Board of Directors issued 61,582 share options in March 2024 with the nominal value of DKK 0.25 at an exercise price of
DKK 0.25. The share options' lifetime is 2 years. All the share options vest at the grant date. In November 2024, the Board of Directors
cancelled 21,512 of these share options.
The general terms for all issues based on the 2022 share options program to the Board of Directors are summarized as follows:
Earliest exercise date immediately from the grant date
Latest exercise date 2 years and 10 months from the grant date
Based on the decision made by the General Assembly in April 2022 to issue 800,000 share options to key employees, the Board of
Directors issued 300,000 share options in June 2022 with a nominal value of DKK 0.25 at an exercise price of NOK 11.00 (DKK 7.92). The
share options' lifetime is 8 years, where the share options holders are subject to a lock-up period in the first year of the share options'
lifetime. The share options vest with 1/4 in each of the following 4 years.
Based on the same decision made by the General Assembly in April 2022 to issue 800,000 share options to key employees, the Board of
Directors issued 400,000 share options in August 2023 with a nominal value of DKK 0.25 at an exercise price of NOK 9.92 (DKK 6.42). The
share options' lifetime is 8 years, where the share options holders are subject to a lock-up period in the first year of the share options'
lifetime. The share options vest with 1/4 in each of the following 4 years.
The general terms for all issues based on the 2022 share options program to key employees are summarized as follows:
Earliest exercise date 1 year from the grant date
Latest exercise date 8 years from the grant date
Based on the decision made by the General Assembly in February 2024 to issue 2,000,000 share options to the CEO, the Board of Directors
issued 2,000,000 share options in February 2024 with the nominal value of DKK 0.25 at an exercise price of NOK 17.21 (DKK 11.26). The
share options' lifetime is 9 years, where the share options holder is subject to a 3-year lock-up period. The share options vest with 1/4 in
each of the following 4 years.
Based on the decision made by the General Assembly in April 2024 to issue 1,500,000 share options to employees and management, the
Board of Directors issued 530,000 share options in June 2024 with a nominal value of DKK 0.25 at an exercise price of NOK 33.10 (DKK
21.60). The share options' lifetime is 8 years, where the share options holders are subject to a 3-year lock-up period. The share options
vest with 1/4 in each of the following 4 years.
All the 3,500,000 share options can be returned to the pool and used for issue to employees and management until 31 January 2029.
The general terms for all issues based on the 2024 share options program are summarized as follows:
Earliest exercise date 3 years from the grant date
Latest exercise date 9 years from the grant date
Based on the decision made by the General Assembly in April 2025 to issue 70,000 share options to members of the Board of Directors,
the Board of Directors issued 30,000 share options in April 2025 with a nominal value of DKK 0.25 at an exercise price of NOK 22.80 (DKK
14.39). The share options' lifetime is 9 years, where the share options holders are subject to a lock-up period in the first year of the share
options' lifetime. The share options vest with 1/4 in each of the following 4 years. The yearly linear vesting of the share options in the
first year is contingent upon the participant having purchased shares in NAPATECH at a purchase price corresponding to 25% of the
participant's fixed annual fee within one year of the grant. The yearly vesting of the share options in the following years is contingent
upon the participant having purchased shares in NAPATECH at a purchase price corresponding to 50% of the participant's fixed annual
fee in each of the following years.
The general terms for all issues based on the 2025 share options program to the Board of Directors are summarized as follows:
Earliest exercise date 1 year from the grant date
Latest exercise date 9 years from the grant date
Consolidated Financial Statements
Annual Report 2025 39
NOTE 7 SHARE-BASED PAYMENTS (CONTINUED)
2025 Other Board of Directors Management Employees Total Avg. Avg. Avg. Avg. Number Number Number Number Share options ex. price ex. price ex. price ex. price At 1 January 2025 312,376 0.25 3,963,334 8.62 1,063,296 13.92 5,339,006 9.19 Granted during the year 30,000 14.39 - - - - 30,000 14.39 Exercised during the year - - (59,167) 5.80 (82,736) 6.20 (141,903) 6.03 Expired/reversed during the year - - (150,000) 11.89 (3,750) 14.63 (153,750) 11.96 At 31 Decem ber 2025 342,376 1.49 3,754,167 8.53 976,810 14.57 5,073,353 9.22 Exercisable at 31 Decem ber 2025 312,376 0.25 1,904,167 6.71 524,310 10.10 2,740,853 6.62
Of the outstanding share options on 31 December 2025 for the Board of Directors 312,376 were granted to Lars Boilesen for his services
as Chairman of the Board. In February 2024, Lars Boilesen moved to the position of CEO. In January 2026 Lars Boilesen moved back to
the position as Chairman of the Board.
2024 Other Board of Directors Management Employees Total Avg. Avg. Avg. Avg. Number Number Number Number Share options ex. price ex. price ex. price ex. price At 1 January 2024 365,494 0.25 2,458,333 5.34 751,635 5.58 3,575,462 4.87 Granted during the year 114,506 0.25 2,000,000 11.26 530,000 21.60 2,644,506 12.86 Exercised during the year (127,624) 0.25 (494,999) 3.03 (198,339) 3.24 (820,962) 2.65 Expired/reversed during the year (40,000) 0.25 - - (20,000) 9.89 (60,000) 3.46 At 31 Decem ber 2024 312,376 0.25 3,963,334 8.62 1,063,296 13.92 5,339,006 9.19 Exercisable at 31 Decem ber 2024 312,376 0.25 1,238,333 5.10 392,354 5.65 1,943,063 4.43
The share-based payment expense for the Group specified in management categories can be found in note 6.
The following shows the exercise price of the outstanding share options Number of share options at 31 December 2025 2024 Exercise price DKK 3.88 186,185 197,521 Exercise price DKK 2.45 9,167 18,334 Exercise price DKK 1.16 573,125 592,525 Exercise price DKK 2.89 235,500 253,750 Exercise price DKK 14.63 252,000 377,000 Exercise price DKK 0.25 272,306 272,306 Exercise price DKK 7.92 300,000 300,000 Exercise price DKK 6.42 645,000 757,500 Exercise price DKK 11.26 2,000,000 2,000,000 Exercise price DKK 0.25 40,070 40,070 Exercise price DKK 21.6 530,000 530,000 Exercise price DKK 14.39 30,000 - Total number of outstanding share options 5,073,353 5,339,006
Consolidated Financial Statements
Annual Report 2025 40
NOTE 7 SHARE-BASED PAYMENTS (CONTINUED)
The following shows the weighted average of the remaining contractual period for the outstanding share options
Weighted average of remaining contract period (years) at 31 December202520242017 share options program0.751.752018 share options program0.771.782019 share options program1.582.582020 share options program4.275.222021 share options program3.674.632022 share options program for Board of Directors1.330.462022 share options program for key employees5.086.172024 share options program6.177.962025 share options program for Board of Directors6.83-
Assumptions for the calculation of the fair value of share options granted in the period
The fair value of share options granted was estimated on the date of grant using the following assumptions:
Granted in 2025 April 2025 Share price (NOK) 19.00 Volatility 55.57% Risk-free interest rate 3.82% Exercise price (DKK) 14.39 Exercise period (years) 1.00 - 9.00 Number of options 30,000 Grant date fair value for each option (DKK) 6.88
Granted in 2024FebruaryMarchMarchJune2024202420242024Share price (NOK)18.0510.3010.3033.10Volatility50.29%54.48%54.48%57.13%Risk-free interest rate 3.80%3.17%3.17%3.49%Exercise price (DKK) 11.260.250.2521.60Exercise period (years) 3.00 - 9.000 - 2.000 - 2.003.00 - 8.00Number of options2,000,00052,92461,582530,000Grant date fair value for each option (DKK)6.896.416.3713.66
The fair value of the share options is determined using the Black-Scholes option-pricing model. Dividend is not included since the group
has never distributed any dividends and has no plan to do so. The applied expected time to exercise used in the model is based on the
ultimate exercise date for the holder of the share options. The expected volatility reflects the assumption that the historical volatility
over the latest two years up till grant date is indicative of future trends. These expectations may not necessarily be the actual outcome.
Consolidated Financial Statements
Annual Report 2025 41
NOTE 8 AUDITORS' FEE
DKK'000 2025 2024 Fees to the Company's auditor appointed by the general meeting: Statutory audit fee 731 580 Total auditors' fees 731 580
NOTE 9 DEPRECIATION, AMORTIZATION AND IMPAIRMENT
DKK'000 2025 2024 Depreciation, amortization and impairment are reported as follow s: Depreciation of plant and equipment 2,390 3,759 Depreciation of leasehold improvements 160 177 Depreciation of right-of-use assets 3,253 3,258 Total depreciation of tangible assets 5,803 7,194 Amortization of patents 351 540 Impairment of patents - 133 Amortization of completed development projects 15,978 21,459 Total amortization and impairment of intangible assets 16,329 22,132 Total depreciation, amortization and impairment 22,132 29,326
NOTE 10 FINANCE INCOME
DKK'000 2025 2024 Interest receivable from banks 1,069 1,617 Foreign exchange gains - 698 Total finance income 1,069 2,315 Finance income at amortized costs 1,069 1,617
Consolidated Financial Statements
Annual Report 2025 42
NOTE 11 FINANCE COSTS
DKK'000 2025 2024 Interest payable to banks 1,044 1,922 Foreign exchange losses 3,403 - Interest payable under leases 433 378 Other finance costs 574 1,523 Total finance costs 5,454 3,823 Finance costs at am ortized costs 2,051 3,823
NOTE 12 INCOME TAX
DKK'000 2025 2024 Current tax recognized in the consolidated income statement: Current income tax 1,401 431 Current income tax carry back ref und (5,500) (5,500) Adjustment prior years taxes (365) (761) Total income tax (4,464) (5,830)
A reconciliation between tax expense and profit before tax multiplied by the applicable income tax rate for the Group for 2025 and
2024 is as follows:
DKK'000 2025 2024 Profit bef ore tax (85,119) (117,087) At the applicable Danish income tax rate for the Group, 22.0% (2024: 22.0%) (18,726) (25,759) Tax effect of: Tax-deductable expenses (1,457) (4,393) Non-deductible expenses 1,707 2,270 Accounting estimate for not recognized def erred tax assets 13,561 22,645 Adjustment prior year taxes (365) (761) Other deviations in foreign subsidiaries including other tax rates 816 168 At the effective incom e tax rate of 5% (2024: 5%) (4,464) (5,830)
Consolidated Financial Statements
Annual Report 2025 43
NOTE 13 EARNINGS PER SHARE
DKK'000 2025 2024 Net profit attributable to equity holders of the parent company for basic earnings and the effect of dilution (80,655) (111,257)
2025 2024 Thousands Thousands Weighted average number of shares for basic earnings per share 105,950 96,373 Effect of dilution: Share options - - Weighted average number of shares adjusted for the effect of dilution 105,950 96,373 Number of share options w ith potential effect of dilution 2,378 2,505
According to IAS 33, the effect of dilution from share options is not allowed to decrease the loss of earnings per share.
NOTE 14 INTANGIBLE ASSETS
Development Development projects, projects, in completed progress Patents Total 2025 2024 2025 2024 2025 2024 2025 2024 DKK'000 Cost at 1 January 202,647 330,897 4,269 2,226 5,728 10,435 212,644 343,558 Additions in the year - - 8,081 6,665 - - 8,081 6,665 Transfers in the year 3,124 4,622 (3,124) (4,622) - - - - Disposals - (132,872) - - - (4,707) - (137,579) Cost at 31 Decem ber 205,771 202,647 9,226 4,269 5,728 5,728 220,725 212,644 Accumulated impairment and amortization at 1 January 182,883 294,296 - - 4,686 8,720 187,569 303,016 Amortization for the year 15,978 21,459 - - 351 540 16,329 21,999 Impairment for the year - - - - - 133 - 133 Disposals - (132,872) - - - (4,707) - (137,579) Accumulated amortization and impairm ent at 31 Decem ber 198,861 182,883 - - 5,037 4,686 203,898 187,569 Carrying am ount at 31 Decem ber 6,910 19,764 9,226 4,269 691 1,042 16,827 25,075
The disposals of development projects and the impairment and disposals of patents in 2024 relate to old assets no longer used.
Within the completed development projects, the 3 largest development projects have a carrying amount of DKK 2,696 thousand, DKK
2,180 thousand, and DKK 951 thousand, respectively (December 31, 2024, the first project was completed with a carrying amount of DKK
4,237 thousand, the second project was in progress with a carrying amount of DKK 1,297 thousand and the third project was completed
with a carrying amount of DKK 3,233 thousand). The first and third projects are both aimed at implementing Capture SW functionality
on HW platform NT400D11. The second project is aimed at developing a new HW platform NT400D13 based on Agilex AGF022. The
remaining amortization periods of these 3 projects are 1 year and 9 months, 2 years and 6 months, and 5 months, respectively.
Consolidated Financial Statements
Annual Report 2025 44
NOTE 14 INTANGIBLE ASSETS (CONTINUED)
The Group recognized DKK 0 thousand as an impairment in 2025 (2024: DKK 133 thousand) in respect of the Group's development
projects and patents.
At year-end 2025, the Group performed its annual impairment test, based on the value in use, for both Completed and In Progress
Development Projects. The Group considers the relationship between its market capitalization and its accounting value, among other
factors, when assessing for indicators of impairment.
In relation to the annual impairment test, the following key assumptions were applied:
• The projects are summarized in three cash-generating units identified, representing Napatech's development activities and
product road maps.
• The recoverable amount has been determined based on a value-in-use calculation using cash flow projections from financial
budgets for 2026 and cash flow projections for a three-year period. The three-year cash flow projections are based on a three-
year strategic plan and investment budget, which are approved by the board of directors. The CAGR from 2026 to 2028,
assumed in the impairment test, is 42%. Due to uncertainty in projections, the impairment test is based on a finite life span of
three years, equalling the estimated useful life and not including any terminal period. A sensitivity analysis has been performed
on the impartment test, showing a DKK 1.0 million impairment needed if the CAGR for the period is lowered by around 18%-
points.
• Discount rates representing the current market assessment of the risks specific to the development project were applied to
cash flow projections, but since the impairment test is based on a finite life span of three years and without any terminal period,
the applied discount rate only had a marginal impact on the impairment test. A discount rate after tax of 22% is used in the
impairment test.
The Board of Directors has approved the inputs to the impairment test and is satisfied that the judgments made are appropriate.
The results of the impairment test for both Completed and In Progress Development Projects showed that the recoverable amount
exceeded the carrying value and that there was no impairment loss to be recognized.
NOTE 15 TANGIBLE ASSETS
Plant and Leasehold equipment improvements Total 2025 2024 2025 2024 2025 2024 DKK'000 Cost at 1 January 19,270 15,106 1,998 1,696 21,268 16,802 Additions 1,034 4,130 123 302 1,157 4,432 Currency adjustment (72) 34 - - (72) 34 Cost at 31 Decem ber 20,232 19,270 2,121 1,998 22,353 21,268 Accumulated depreciation at 1 January 14,505 10,716 1,557 1,380 16,062 12,096 Depreciation for the year 2,390 3,759 160 177 2,550 3,936 Currency adjustment (64) 30 - - (64) 30 Accum ulated depreciation at 31 Decem ber 16,831 14,505 1,717 1,557 18,548 16,062 Carrying am ount at 31 Decem ber 3,401 4,765 404 441 3,805 5,206
In 2025, the Group assessed the tangible assets for impairment. In relation to this no impairment has been recognized.
Consolidated Financial Statements
Annual Report 2025 45
NOTE 16 LEASING
Right-Of-Use Assets
Plant and Properties equipment Total 2025 2024 2025 2024 2025 2024 DKK'000 Balance at 1 January 8,921 7,460 279 421 9,200 7,881 Additions - 4,439 233 138 233 4,577 Depreciation for the year (2,973) (2,978) (280) (280) (3,253) (3,258) Carrying am ount at 31 Decem ber 5,948 8,921 232 279 6,180 9,200
Lease Liabilities
DKK'000 2025 2024 Maturity of lease liabilities incl. interest: Falling due w ithin one year 3,477 3,546 Falling due betw een one and three years 3,446 6,757 Total lease liabilities 6,923 10,303
See note 2 for a description of the extent of the Group's leases, exposure to potential cash flows, and the process of determining the
discount rate.
Amounts recognized in the consolidated income statement
DKK'000 2025 2024 Depreciation 3,253 3,258 Finance costs 433 378 Expense relating to low -value assets (included in other external costs) 6 6 Expense relating to short-term leases (included in other external costs) 83 104 Total lease costs recognized in the consolidated income statement 3,775 3,746
For 2025, the Group has recognized DKK 3,632 thousand (2024: DKK 3,561 thousand) as minimum payments regarding lease agreements,
of which interest costs related to lease liabilities amount to DKK 433 thousand (2024: DKK 378 thousand) and repayments on lease
liabilities amount to DKK 3,199 thousand (2024: DKK 3,183 thousand). The capitalized right-of-use assets do not have any effect on
investing activities in the cash flow statement.
Consolidated Financial Statements
Annual Report 2025 46
NOTE 17 DEFERRED TAX
Consolidated statement Consolidated income of financial position statement 2025 2024 2025 2024 DKK'000 Intangible assets 4,560 4,086 474 1,364 Tangible assets (2,525) (1,363) (1,162) (499) Lease liabilities (1,443) (2,097) 654 (307) Provision for expected credit loss (592) (626) 34 (558) Deferred tax liability / (asset) and expense / (income) - - - -
The Group has tax losses of DKK 324,213 thousand (2024: DKK 272,886 thousand) that are available indefinitely for offsetting against
future taxable profit. In 2025, the deferred tax assets were not fully recognized in respect of these losses due to uncertainty in timing to
offset future taxable profit. Determining the amount that can be recognized for deferred tax assets is based on estimates of the probable
timing and size of future taxable profit. When assessing future profits, historical profits have been taken into account. If the Group were
able to recognize all unrecognized deferred tax assets, the value would be DKK 72,189 thousand (2024: DKK 58,628 thousand).
NOTE 18 INVENTORIES
DKK'000 2025 2024 Consumables and components 18,095 12,080 Finished goods and goods for resale 38,583 57,796 Total inventories 56,678 69,876 Carrying value of inventories recognised at fair value - -
The cost of goods sold for the year is DKK 44,733 thousand (2024: DKK 37,049 thousand), which also includes movements in inventory
write-down for the year. Movements in inventory write-down are as follows:
DKK'000 2025 2024 Inventory w rite-dow n at 1 January 3,090 1,908 Inventory w rite-dow n for the year 593 1,322 Reversal of inventory w irte-dow n (2,520) (140) Inventory w rite-dow n at 31 December 1,163 3,090
In 2025 DKK 593 thousand (2024: DKK 1,322 thousand) is recognized as an impairment expense. The impairment expense in 2025 is
mainly related to products with slow tradability. The impairment expense in 2024 was mainly related to the decision to end the life of a
group of products.
Reversal of inventory write-down in 2025, DKK 2,520 thousand, relates mainly to end-of-life products which has been scrapped in 2025.
Costs of the scrapped products in 2025 is DKK 3,311 thousand, which exceeds the positive effect from reversal of inventory write-down.
In 2024 the reversal of inventory write-down related mainly to products sold in 2024.
Consolidated Financial Statements
Annual Report 2025 47
NOTE 19 TRADE AND OTHER RECEIVABLES
DKK'000 2025 2024 Receivables recognized in the consolidated statement of financial position: Trade receivables 37,733 19,381 Other receivables 12,350 23,762 Total current receivables 50,083 43,143
Trade receivables regarding service contracts on December 31, 2025, was DKK 4,950 thousand; on December 31, 2024, DKK 231
thousand; and on January 1, 2024, DKK 11,522 thousand.
Other receivables primarily consist of inventory support payments to the manufacturing company used by the Group.
Movements in the provision for bad debts on trade receivables are as follows:
DKK'000 2025 2024 At 1 January 3,385 917 Reversed in the year (155) (90) Provision in the year 38 2,558 At 31 Decem ber 3,268 3,385
See note 27 for the aging analysis of trade receivables and description of the credit risk.
NOTE 20 INCOME TAX RECEIVABLES
DKK'000 2025 2024 At 1 January 6,345 5,885 Income tax carry back ref und 5,500 5,502 Income tax received during the year (5,979) (5,372) Current income tax (1,401) (431) Adjustment prior years taxes 365 761 At 31 Decem ber 4,830 6,345
NOTE 21 ISSUED CAPITAL AND RESERVES
2025 2024 Authorised shares thousands thousands Ordinary shares of DKK 0.25 each at 1 january 99,997 90,176 Increase in ordinary shares DKK 0.25 each 10,142 9,821 Ordinary shares of DKK 0.25 each at 31 Decem ber 110,139 99,997
Consolidated Financial Statements
Annual Report 2025 48
NOTE 21 ISSUED CAPITAL AND RESERVES (CONTINUED)
Ordinary shares and fully paid 2025 2024 Thousands DKK'000 Thousands DKK'000 At 1 January 99,997 24,999 90,176 22,544 Exercise of share options for cash during the year 142 36 821 205 Capital increase 10,000 2,500 9,000 2,250 At 31 Decem ber 110,139 27,535 99,997 24,999
DKK'00020252024Share premiumAt 1 January483,062343,064Issue of shares for cash in excess of the cost of ordinary shares during the year128,188143,117Transaction costs (4,954)(5,382)Reversals regarding exercised share options 5752,263At 31 Decem ber606,871483,062
Treasury shares
Treasury shares have been acquired with the purpose of settling share options in the Group's share option program.
The reduction in the treasury share equity component is equal to the cost incurred to acquire the shares on a weighted average basis.
Any excess of the cash received from employees over the reduction in treasury shares is recorded in share premium, and any deficit of
cash received is recorded in retained earnings.
Movements in treasury shares are as follows:
2025 2024 Number of Percentage Number of Percentage shares of of share shares of of share DKK'000 DKK 0.25 capital DKK'000 DKK 0.25 capital thousands thousands At 1 January (619)(64)-0.1%(2,110) (218)-0.3%Disposal - - 0.0%1,491 154 0.2%At 31 Decem ber (619)(64)-0.1%(619)(64)-0.1%
Share-based payment reserve
Share-based payment reserve is issued to recognize the value of equity-settled share-based payments provided to employees, including
key management personnel, and the Board of Directors as part of their remuneration. Refer to note 7 for further details on the share-
based payment programs.
Movements in share-based payment reserve are as follows:
DKK'000 2025 2024 At 1 January 18,946 10,707 Share-based payment expense (Note 7) 8,095 10,899 Reversal, exercised and lapsed share options (1,921) (2,660) At 31 Decem ber 25,120 18,946
Consolidated Financial Statements
Annual Report 2025 49
NOTE 22 FINANCIAL ASSETS AND FINANCIAL LIABILITIES
DKK'00020252024Financial assets measured at amortized cost:Leasehold deposits 1,6361,587Trade receivables 37,73319,381Other receivables12,35023,762Cash and cash equivalents127,47064,341Total financial assets 179,189109,071Financial liabilities measured at amortized cost:Other financial liabilities 4,6524,540Interest-bearing loans and borrow ings 28,05242,904Trade payables 8,1095,789Total financial liabilities 40,81353,233
Carrying amounts of financial assets and financial liabilities approximate their fair value. The main part of the financial liabilities is
current/short-term. Loans and overdraft facilities are subject to variable interest rates.
NOTE 23 CONTRACT LIABILITIES
Contract liabilities relate to prepayment from customers regarding engineering services, extended warranties and technical product
support. The movements in contract liabilities are as follows:
DKK'00020252024At 1 January4,7877,689Def erred during the year5,0345,500Recognized as revenue during the year(2,644)(8,402)At 31 Decem ber7,1774,787
The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) on 31 December is expected
to be recognized as revenue in the income statement as follows:
DKK'00020252024Within one year5,8333,237More than one year1,3441,5507,1774,787
The remaining performance obligation expected to be recognized as revenue in more than one year primarily relates to extended
warranties.
Consolidated Financial Statements
Annual Report 2025 50
NOTE 24 LIABILITIES FROM FINANCING ACTIVITIES
2024 At 31 At 1 Non-cash Cash flow s DKK'000 January December Interest bearing loans and borrow ings 44,105 - (1,201) 42,904 Other financial liabilities 4,433 81 26 4,540 Lease liabilities 8,136 4,955 (3,561) 9,530 Total liabilities from financing activities 56,674 5,036 (4,736) 56,974
NOTE 25 COMMITMENTS AND CONTINGENCIES
Collaterals
The Group has issued a floating charge in the amount of DKK 40 million (2024: DKK 40 million) secured on receivables, inventories,
patents, and plant and equipment with a carrying amount of DKK 79.0 million (2024: DKK 82.4 million) as collateral for loans.
Contingent liabilities
The Group has engaged in a contract providing engineering services with an earn-back: clause to provide a one-time rebate of part of the
consideration paid by the customer for engineering services once the Group sells a specific number of cards to the customer. The
potential rebate amounts to DKK 2.3 million. It is yet uncertain if the sales will exceed the threshold for the earn-back.
NOTE 26 RELATED PARTY DISCLOSURES
Controlling influence
The Group has no shareholders with controlling influence.
Entity with significant influence over the Group
There are no entities with significant influence over the Group on December 31, 2025 (2024: no entities).
The Group had no transactions with shareholders with significant influence or their portfolio companies in 2025 and 2024.
Transactions with key management personnel
Remunerations, salaries, and share-based payments to the Board of Directors and the Executive Management are reflected in note 5.
There were no other transactions with the Board of Directors and the Executive Management in 2025.
In 2024, there was a transaction regarding the sale of 153,787 treasury shares to the CEO. The sale was carried out at fair market value.
Besides this, there were no other transactions with the Board of Directors and the Executive Management in 2024.
2025At 1At 31 Non-cash Cash flow s DKK'000JanuaryDecemberInterest bearing loans and borrow ings 42,904-(14,852)28,052Other financial liabilities 4,54098144,652Lease liabilities 9,530229(3,199)6,560Total liabilities from financing activities56,974327(18,037)39,264
Consolidated Financial Statements
Annual Report 2025 51
NOTE 27 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's principal financial liabilities comprise interest-bearing loans and borrowings, trade, and other payables. The main purpose
of these financial liabilities is to finance the Group's operations. The Group has trade and other receivables, cash, and long-term leasehold
deposits that derive directly from its operations.
The Group is exposed to credit risk, liquidity risk, interest rate risk, and foreign currency risk. The Group's senior management provides
assurance that financial risks are identified, measured, and managed in accordance with the Group's policies and risk objectives. It is the
Group's policy not to undertake any trading in derivatives for speculative purposes. The Board of Directors reviews and agrees on policies
for managing each of these risks, which are summarized below.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a customer contract, leading to financial loss. The Group is
exposed to credit risk from its operating activities, receivables, and deposits with banks.
Trade receivables
Customer credit risk is managed at the group level. The credit quality of a customer is assessed based on a review of available financial
information. The Group's customers have 30 - 90 days as a standard payment term, with the vast majority of sales on 30 days payment
term. Historically, the Group has not had material impairment for bad debts.
On December 31, 2025, the Group had 2 customers (December 31, 2024: 3 customers) that owed the Group more than 10% of all trade
receivables. The amount receivable from these 2 customers on 31 December 2025 was DKK 6,845 thousand and DKK 4,108 thousand
respectively. The credit risk associated with the first customer has been assessed as low, and the receivable was fully paid in January
2026. For the second customer, DKK 4,108 thousand of the receivable is past due, with the due date exceeded by more than 90 days,
and a provision for impairment loss made for this part with DKK 2,471 thousand calculated based on the expected loss percentage as
described below. The overdue part is due to special circumstances, and the loss provision is assessed to be sufficient
The assessment of the need for impairment of financial assets measured at amortized cost, including trade receivables, is made according
to the simplified expected credit loss model. The model implies that the expected loss over the lifespan of the asset is recognized
immediately in the income statement and is continuously monitored in accordance with the Group's risk management until realization.
Impairment is calculated based on expected loss percentages, which are calculated individually per geographical location. Loss
percentages are calculated based on historical data based on expected losses over the total maturity of the receivable, adjusted for
estimates of the effect of expected changes in relevant parameters, such as economic development, political risks, etc., in the given
market.
2025 Expected Loss Receivable Total DKK'000 percentage loss Not past due 0.9% 33,485 315 33,170 Past due for less than 30 days 2.3% 2,809 65 2,744 Past due betw een 30 and 60 days 5.1% 117 6 111 Past due after 90 days 62.8% 4,590 2,882 1,708 Total m axim um credit risk 41,001 3,268 37,733
2024ExpectedLossReceivableTotalDKK'000percentage lossNot past due0.9%16,72415716,567Past due for less than 30 days2.3%99023967Past due after 90 days63.4%5,0523,2051,847Total m axim um credit risk22,7663,38519,381
Consolidated Financial Statements
Annual Report 2025 52
NOTE 27 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
The maximum exposure to credit risk for trade receivables at the reporting date is the carrying value disclosed in note 19. The Group
does not hold collateral as security. The Group evaluates the concentration of risk with respect to trade receivables as low, as its
customers are located in several jurisdictions and operate independently. The customer credit risk related to geographical segments in
which the Group operates is similar and does not differ significantly.
Other receivables
Other receivables on December 31, 2025, primarily consist of inventory support payments to the manufacturing company used by the
Group and will be repaid as the inventory need regarding the Group declines. The Group considers the credit risk regarding this receivable
to be low based on many years of experience in close collaboration with the manufacturing company.
Cash deposits
Credit risk from balances with banks is managed by the senior management in accordance with the Group's policy. Investments of surplus
funds are mainly made to finance development projects. Development projects are reviewed by the senior management on a quarterly
basis.
The Group's maximum exposure to credit risk for the components of the statement of financial position on December 31, 2025, and 2024
is the carrying amounts as illustrated in note 22.
Liquidity risk
Liquidity risk is the risk that the Group is unable to repay its financial liabilities as they fall due.
The Group monitors cash flows on a monthly basis and a maximum of one year in advance. The aim is to ensure sufficient cash from the
operating activities to fund project development and daily operations.
December 31, 2025, the Group had unused credit facilities of DKK 0.1 million (unused credit facilities December 31, 2024: DKK 2.8 million).
In March 2022, the Group established an overdraft facility of DKK 30 million in Denmark in addition to the facility in the US of USD 1
million. In 2025 the overdraft facility in Denmark was reduced to DKK 15 million due to termination of the EIFO guarantee. The overdraft
facility in Denmark is up for renewal yearly. Next time in March 2027, and it is the assessment of management that the overdraft facilities
will be renewed, as management has no indications of otherwise. The facility in the US is up for renewal in March 2027. In addition to
the overdraft facility, the Group has established a loan of DKK 10 million to be repaid in 5 years from January 1, 2024, with a fixed yield
at DKK 673 thousand per quarter and variable interest, balance on December 31, 2025, was DKK 6,752 thousand.
Based on the budget for 2026, the cash available, together with the unused credit facilities, are assessed to be sufficient to cover the
Group's obligations and planned investments as they fall due for a period of at least 12 months from December 31, 2025.
The Group's manufacturing policy is based on order production to ensure minimal amounts of cash are being tied up in inventories. The
majority of the Group’s suppliers’ terms of payment are 30 days, and the Group's customers’ standard terms of payment are between
30 and 90 days, with the vast majority of sales on 30 days payment term.
In line with previous reporting periods, the Group's policy for liquidity management is to ensure timely payments from customers and to
balance suppliers' credit terms with the terms of payment offered to the customers.
The Group's cash inflows arising from the financial assets and outflows arising from the financial liabilities recognized in the consolidated
statement of financial position are due as follows:
2025 Jan - Mar Apr - Dec1 - 2 ye ars over 2 ye arTotal DKK'000 Leasehold deposits - - - 1,636 1,636 Trade receivables 37,733 - - - 37,733 Other receivables 766 11,584 - - 12,350 Cash and cash equivalents 127,470 - - - 127,470 Total financial assets 165,969 11,584 - 1,636 179,189
Consolidated Financial Statements
Annual Report 2025 53
NOTE 27 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
2025 Jan - Mar Apr - Dec 1 - 2 ye ars over 2 ye ar Total DKK'000 Interest-bearing loans and borrow ings *) 21,973 2,019 2,692 2,532 29,216 Other financial liabilities - - 154 4,498 4,652 Trade payables 8,109 - - - 8,109 Total financial liabilities 30,082 2,019 2,846 7,030 41,977
2024Jan - MarApr - Dec1 - 2 yearsover 2 ye arTotalDKK'000Leasehold deposits ---1,5871,587Trade receivables 19,381---19,381Other receivables10,73713,025--23,762Cash and cash equivalents 64,341---64,341Total financial assets 94,45913,025-1,587109,071
2024 Jan - Mar Apr - Dec 1 - 2 ye ars over 2 ye ar Total DKK'000 Interest-bearing loans and borrow ings *) 1,221 37,164 2,692 5,467 46,545 Other financial liabilities - - - 4,540 4,540 Trade payables 5,789 - - - 5,789 Total financial liabilities 7,010 37,164 2,692 10,007 56,874 ‘*) The cash outflow arising from Interest-bearing loans and borrowings in the above tables include interest calculated until maturity with interest rates
in force at the end of December.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. The Group's exposure to the risk of changes in market interest rates relates mainly to the Group's interest-bearing loans
with the amount of DKK 28,052 thousand (2024 DKK 42,904 thousand). The interest rates on the Group´s loans and credit facilities are
variable and in the range of 5.20% - 9.19% at the end of December 2025. The Group's policy is to keep sufficient cash in place to mitigate
adverse impacts caused by fluctuation in market interest rates. The interest rates used to determine lease obligations are fixed. The
Group's interest rate risk is immaterial.
Foreign currency risk
The parent company's functional currency is DKK. The Group's revenues and cost of goods sold are mainly denominated in USD. The
majority of all other transactions are denominated in DKK and USD. The Group's main currency risk is thus associated with fluctuations
in USD against DKK. The Group has negligible transactions in other currencies.
Consolidated Financial Statements
Annual Report 2025 54
NOTE 27 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Sensitivity analysis of presentation currency
The following demonstrates the sensitivity to a reasonably likely change in the DKK exchange rate, with all other variables held constant.
The effect on the Group's profit before tax and equity is due to changes in the fair value of monetary assets and liabilities.
Effect on profit before tax Effect on equity 2025 2024 2025 2024 DKK'000 Change in USD by +/÷ 5% +/÷ 5,392 +/÷ 1,743 +/÷ 4,206 +/÷ 1,360 Change in USD by +/÷ 10% +/÷ 10,783 +/÷ 3,487 +/÷ 8,411 +/÷ 2,720
Capital management
Capital includes shares attributable to the equity holders of the parent company.
The primary objective of the Group's capital management, in the short term, is to ensure the sufficient capital needed to fund the
development of new products and new markets and thereby create a healthy business platform to ensure returns to the shareholders in
the long term.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders,
or issue new shares. The Group has not distributed any dividends, and it is not expecting to do so in the near future.
To ensure sufficient capital to fund project development and daily operations, the Group on May 27, 2025, completed a private
placement of 10,000,000 shares at a subscription price of NOK 20.00 per share, raising DKK 130 million in gross proceeds.
NOTE 28 EVENTS AFTER THE REPORTING PERIOD
There have been no significant events after December 31, 2025, that might affect the consolidated financial statements.
PARENT COMPANY FINANCIAL STATEMENTS
Parent Company Financial Statements
Annual Report 2025 56
PARENT COMPANY INCOME STATEMENT
For the year ended 31 December 2025
Note
2
3, 5
6
7
8
9
10
DKK'000
2025
2024
Revenue
118,657
87,802
Cost of goods sold
(44,718)
(36,998)
Gross profit
73,939
50,804
Staff costs
(88,463)
(80,793)
Other external costs
(46,725)
(58,078)
Operating profit before depreciation, amortization and impairment (EBITDA)
(61,249)
(88,067)
Depreciation, amortization and impairment
(22,088)
(29,275)
Operating result (EBIT)
(83,337)
(117,342)
Finance income
902
2,302
Finance costs
(5,343)
(3,243)
Result before tax
(87,778)
(118,283)
Income tax
5,500
5,500
Result for the year
(82,278)
(112,783)
Parent Company Financial Statements
Annual Report 2025 57
PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2025
Note
DKK'000
2025
2024
Result for the year
Net other comprehensive loss that may be reclassified to profit or loss in
subsequent periods
(82,278)
-
(112,783)
-
Total other comprehensive income / (loss) for the year, net of tax
-
-
Total comprehensive income / (loss) for the year, net of tax
(82,278)
(112,783)
Parent Company Financial Statements
Annual Report 2025 58
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
at 31 December 2025
ASSETS
Note
11
12
13
12
14
20
16
17, 20
17, 20
17, 20
18
20
DKK'000
2025
2024
Development projects, completed
6,910
19,764
Development projects, in progress
9,226
4,269
Patents
691
1,042
Intangible assets
16,827
25,075
Plant and equipment
3,332
4,683
Right-of-use assets
6,180
9,200
Leasehold improvements
404
441
Tangible assets
9,916
14,324
Investments in subsidiaries
9,265
8,870
Leasehold deposits
1,636
1,579
Other non-current assets
10,901
10,449
Non-current assets
37,644
49,848
Inventories
56,678
69,876
Trade receivables
18,308
6,784
Receivables from group entities
33,945
-
Prepayments
4,390
5,081
Other receivables
12,350
23,762
Income tax
receivable
5,500
5,502
Cash and cash equivalents
84,247
52,693
Current assets
215,418
163,698
Total assets
253,062
213,546
Parent Company Financial Statements
Annual Report 2025 59
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
at 31 December 2025
EQUITY AND LIABILITIES
Note
19
19
19
19
20, 22
20, 22
13, 22
21
20, 22
13, 22
20
20
21
DKK'000
2025
2024
Issued capital
27,535
24,999
Share premium
606,871
483,062
Treasury shares
(619)
(619)
Share-based payment reserve
25,120
18,946
Reserve for development project costs
12,586
18,746
Retained earnings
(473,143)
(398,372)
Equity
198,350
146,762
Interest-bearing loans and borrow ings
4,678
6,806
Other financial liabilities
4,652
4,540
Lease liabilities
3,349
6,406
Contract liabilities
1,344
1,550
Non-current liabilities
14,023
19,302
Interest-bearing loans and borrow ings
17,021
28,955
Lease liabilities
3,211
3,124
Trade payables
8,049
5,601
Payables to group entities
-
185
Other payables
10,196
6,853
Contract liabilities
2,212
2,764
Current liabilities
40,689
47,482
Total liabilities
54,712
66,784
Total equity and liabilities
253,062
213,546
Parent Company Financial Statements
Annual Report 2025 60
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2025
Reserve
for
Note
DKK'000
Share
capital
Share
premium
Treasury
shares
Share
based
paym ent
reserve
develop-
ment
project
costs
Retained
earnings
Total
equity
At 1 January 2024
22,544
343,064
(2,110)
10,707
30,286
(297,092)
107,399
Result for the year
-
-
-
-
(11,540)
(101,243)
(112,783)
Total comprehensive income
-
-
-
-
(11,540)
(101,243)
(112,783)
Issue of shares
2,455
143,117
-
-
-
-
145,572
Transaction costs
-
(5,382)
-
-
-
-
(5,382)
Increase (decrease) through treasury share
transactions
-
-
1,491
-
-
-
1,491
Reversal, exercised and lapsed share options
-
2,263
-
(2,660)
-
(37)
(434)
6
Share-based payments
-
-
-
10,899
-
-
10,899
Total transactions w ith shareholders
2,455
139,998
1,491
8,239
-
(37)
152,146
At 31 Decem ber 2024
24,999
483,062
(619)
18,946
18,746
(398,372)
146,762
Result for the year
-
-
-
-
(6,160)
(76,118)
(82,278)
Total comprehensive income
-
-
-
-
(6,160)
(76,118)
(82,278)
Issue of shares
2,536
128,188
-
-
-
-
130,724
Transaction costs
-
(4,954)
-
-
-
-
(4,954)
Reversal, exercised and lapsed share options
-
575
-
(1,921)
-
1,347
1
6
Share-based payments
-
-
-
8,095
-
-
8,095
Total transactions w ith shareholders
2,536
123,809
-
6,174
-
1,347
133,866
At 31 Decem ber 2025
27,535
606,871
(619)
25,120
12,586
(473,143)
198,350
Parent Company Financial Statements
Annual Report 2025 61
PARENT COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 December 2025
Note
DKK'000
2025
2024
Operating activities
Result bef ore tax
(87,778)
(118,283)
Adjustments to reconcile profit before tax to net cash flows:
Finance income
(902)
(2,302)
Finance costs
5,343
3,243
Depreciation, amortization and impairment
22,088
29,275
Share-based payment expense
7,700
10,273
Working capital adjustments:
Change in inventories
13,198
(34,304)
Change in trade and other receivables, prepayments and intercompany receivables
(36,496)
15,670
Change in trade and other payables, intercompany payables and contract liabilities
4,826
(7,295)
Interest received
902
1,603
Interest paid
(1,682)
(2,555)
Income tax received, net
5,502
5,500
Net cash flow s from operating activities
(67,299)
(99,175)
Investing activities
Purchase of tangible assets
(1,118)
(4,350)
Investments in intangible assets
(8,081)
(6,665)
Investments in leasehold deposits
(57)
(46)
Net cash from investing activities
(9,256)
(11,061)
Free cash flow
(76,555)
(110,236)
Financing activities
Capital increase
130,724
145,572
Payments regarding share options
-
(246)
Transaction costs on issue of shares
(4,954)
(5,382)
Increase (decrease) through treasury share transactions
-
1,491
Repayment of lease liabilities
(3,199)
(3,561)
Repayment of borrow ings
(14,048)
(1,573)
Net cash flow s from financing activities
108,523
136,301
Net change in cash and cash equivalents
31,968
26,065
Net foreign exchange difference
(414)
(1,567)
Cash and cash equivalents at 1 January
52,693
28,195
Cash and cash equivalents at 31 Decem ber
84,247
52,693
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION .......................................................................................................... 63
NOTE 2 REVENUE ............................................................................................................................................................................ 63
NOTE 3 STAFF COSTS ..................................................................................................................................................................... 63
NOTE 4 RESEARCH AND DEVELOPMENT COSTS ....................................................................................................................... 64
NOTE 5 SHARE-BASED PAYMENT EXPENSE ................................................................................................................................ 64
NOTE 6 AUDITORS’ FEES ................................................................................................................................................................ 64
NOTE 7 DEPRECIATION, AMORTIZATION AND IMPAIRMENT ...................................................................................................... 64
NOTE 8 FINANCE INCOME .............................................................................................................................................................. 65
NOTE 9 FINANCE COSTS ................................................................................................................................................................ 65
NOTE 10 INCOME TAX ....................................................................................................................................................................... 65
NOTE 11 INTANGIBLE ASSETS ......................................................................................................................................................... 66
NOTE 12 TANGIBLE ASSETS ............................................................................................................................................................. 66
NOTE 13 LEASING .............................................................................................................................................................................. 66
NOTE 14 INVESTMENTS IN SUBSIDIARIES ..................................................................................................................................... 67
NOTE 15 DEFERRED TAX .................................................................................................................................................................. 68
NOTE 16 INVENTORIES ...................................................................................................................................................................... 68
NOTE 17 TRADE AND OTHER RECEIVABLES ................................................................................................................................. 68
NOTE 18 INCOME TAX RECEIVABLES ............................................................................................................................................. 69
NOTE 19 ISSUED CAPITAL AND RESERVES ................................................................................................................................... 69
NOTE 20 FINANCIAL ASSETS AND FINANCIAL LIABILITIES ........................................................................................................... 70
NOTE 21 CONTRACT LIABILITIES ..................................................................................................................................................... 70
NOTE 22 LIABILITIES FROM FINANCING ACTIVITIES .................................................................................................................... 71
NOTE 23 COMMITMENTS AND CONTINGENCIES ........................................................................................................................... 71
NOTE 24 RELATED PARTY TRANSACTIONS ................................................................................................................................... 71
NOTE 25 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES .................................................................................... 72
NOTE 26 EVENTS AFTER THE REPORTING PERIOD .................................................................................................................... 72
Parent Company Financial Statements
Annual Report 2025 63
NOTE 1 MATERIAL ACCOUNTING POLICY INFORMATION
General
The financial statements for Napatech A/S (the parent company) have been prepared in accordance with IFRS Accounting Standards, as
adopted by the EU, and additional requirements in the Danish Financial Statements Act. The accounting policies for the Parent company
are the same as for the Group as set out in note 2 to the consolidated financial statements, except for the items listed below.
Dividends
Dividends from the investment in subsidiaries are recognized as income in the parent company’s income statement in the year in which
the dividend is declared. Dividends are presented in the cash flow statement as investing activities.
Investments in subsidiaries
Investments in subsidiaries are measured at cost. If there is evidence of impairment, an impairment test is performed. If the cost exceeds
the recoverable amount, a write-down is made to such lower value.
Share-based payments to employees in subsidiaries
The value of share options to the employees in the US-based subsidiary Napatech Inc. is recognized as an increase in the investment in
subsidiaries as the employees’ services rendered in exchange for the share options are received in the subsidiary.
Equity reserve for development project costs
The reserve for development project costs comprises recognized development costs. The reserve cannot be used to distribute dividends
or cover losses. The reserve will be reduced or dissolved with amortization, impairment, or disposed of if the recognized development
costs are no longer part of the Company’s operations by a transfer directly to the distributable reserves under equity.
NOTE 2 REVENUE
Set out below is a disaggregation of the Parent’s revenue from contracts with customers:
DKK'000
2025
2024
- Sales of goods
111,177
80,901
- Sales of services
7,480
6,901
Total revenue
118,657
87,802
NOTE 3 STAFF COSTS
DKK'000
2025
2024
Employee benefits expense is reported as follow s:
Wages and salaries
82,391
72,072
Defined contribution schemes
4,269
4,000
Share-based payment expense (note 5)
7,700
10,273
Social security costs
712
680
Total employee benefits expense
95,072
87,025
Transferred to capitalized development costs
(6,609)
(6,232)
Total staff costs
88,463
80,793
Average number of employees
76
71
Compensation of key management personnel is set out in note 5 to the consolidated financial statements of the Group.
Parent Company Financial Statements
Annual Report 2025 64
NOTE 4 RESEARCH AND DEVELOPMENT COSTS
Research and development costs for the parent company and the Group are the same. Details of research and development costs are
disclosed in note 6 to the consolidated financial statements.
NOTE 5 SHARE-BASED PAYMENT EXPENSE
The share options described in note 7 to the consolidated financial statements are issued by the parent company. The value of share
options granted to employees in the fully owned US-based subsidiary is recognized as the cost of the investment in the subsidiary. Out
of the Group’s total share-based payment expense of DKK 8,095 thousand (2024: DKK 10,900 thousand), DKK 395 thousand (2024: DKK
627 thousand) has been recognized as an additional cost of the investment in the subsidiary see note 14.
NOTE 6 AUDITORS’ FEES
DKK'000
2025
2024
Fees to the Company's auditor appointed by the general meeting:
Statutory audit fee
731
580
Total auditors' fees
731
580
NOTE 7 DEPRECIATION, AMORTIZATION AND IMPAIRMENT
DKK'000
2025
2024
Depreciation, amortization and impairment are reported as follow s:
Depreciation plant and property
2,346
3,708
Depreciation of leasehold improvements
160
177
Depreciation of right-of-use assets
3,253
3,258
Total depreciation of tangible assets
5,759
7,143
Amortization of patents
351
540
Impairment of patents
-
133
Amortization of completed development projects
15,978
21,459
Total amortization and impairment of intangible assets
16,329
22,132
Total depreciation, amortization and impairment
22,088
29,275
Parent Company Financial Statements
Annual Report 2025 65
NOTE 8 FINANCE INCOME
DKK'000
2025
2024
Interest receivable from banks
902
1,604
Foreign exchange gains
-
698
Total finance income
902
2,302
Finance income at amortized costs
902
1,604
NOTE 9 FINANCE COSTS
DKK'000
2025
2024
Interest payable to banks
933
1,398
Foreign exchange losses
3,403
-
Interest payable under leases
433
378
Other finance costs
574
1,467
Total finance costs
5,343
3,243
Finance costs at am ortized costs
1,940
3,243
NOTE 10 INCOME TAX
DKK'000
2025
2024
Current tax recognised in the parent company income statement:
Current income tax carry back ref und
(5,500)
(5,500)
Total income tax
(5,500)
(5,500)
A reconciliation between tax expense and profit before tax multiplied by the applicable income tax rate for the parent company for 2025
and 2024 is as follows:
DKK'000
2025
2024
Profit bef ore tax
(87,778)
(118,283)
At the applicable Danish income tax rate for the parent company, 22% (2023: 22%)
(19,311)
(26,022)
Tax effect of:
Tax deductable expenses
(1,457)
(4,393)
Non-deductible expenses
1,707
2,270
Accounting estimate for not recognized def erred tax assets
13,561
22,645
At the effective incom e tax rate of 6% (2024: 5%)
(5,500)
(5,500)
Parent Company Financial Statements
Annual Report 2025 66
NOTE 11 INTANGIBLE ASSETS
Intangible assets comprise patents and development projects, which are the same for the parent company and the Group. An overview
of these assets is disclosed in note 14 to the consolidated financial statements.
NOTE 12 TANGIBLE ASSETS
Plant and
equipment
Leasehold
improvements Total
DKK'000
2025
2024
2025
2024
2025
2024
Cost at 1 January
18,676
14,628
2,006
1,704
20,682
16,332
Additions
995
4,048
123
302
1,118
4,350
Cost at 31 Decem ber
19,671
18,676
2,129
2,006
21,800
20,682
Accumulated depreciation at 1 January
13,993
10,285
1,565
1,388
15,558
11,673
Depreciation for the year
2,346
3,708
160
177
2,506
3,885
Accum ulated depreciation at 31 Decem ber
16,339
13,993
1,725
1,565
18,064
15,558
Carrying am ount at 31 Decem ber
3,332
4,683
404
441
3,736
5,124
In 2025, the parent company tested the tangible assets for impairment. In relation to this no impairment has been recognized.
NOTE 13 LEASING
Right-Of-Use Assets
Properties
Plant and
equipment
Total
DKK'000
2025
2024
2025
2024
2025
2024
Balance at 1 January
8,921
7,460
280
422
9,200
7,881
Additions
-
4,439
233
138
233
4,577
Depreciation for the year
(2,973)
(2,978)
(280)
(280)
(3,253)
(3,258)
Carrying am ount at 31 Decem ber
5,948
8,921
233
280
6,180
9,200
Lease Liabilities
DKK'000
2025
2024
Maturity of lease liabilities incl. interest:
Falling due w ithin one year
3,477
3,546
Falling due betw een one and three years
3,446
6,757
Total lease liabilities
6,923
10,303
See note 2 to the consolidated financial statements for a description of the extent of the Group's leases, exposure to potential cash flows
and the process of determining the discount rate.
Parent Company Financial Statements
Annual Report 2025 67
NOTE 13 LEASING (CONTINUED)
Amounts recognized in the parent company income statement
DKK'000
2025
2024
Depreciation
3,253
3,258
Finance costs
433
378
Expense relating to low -value assets (included in other external costs)
6
6
Total lease costs recognized in the parent company income statement
3,692
3,642
For 2025, the parent company has recognized DKK 3,632 thousand (2024: DKK 3,561 thousand) as minimum payments regarding lease
agreements, of which interest costs related to lease liabilities amount to DKK 433 thousand (2024: DKK 378 thousand), and repayments
on lease liabilities amount to DKK 3,199 thousand (2024: DKK 3,183 thousand). The capitalized right-of-use assets do not have any effect
on investing activities in the cash flow statement.
NOTE 14 INVESTMENTS IN SUBSIDIARIES
DKK'000
2025
2024
Cost at 1 January
13,620
12,993
Value of share-based payment to employees in subsidiaries
395
627
Cost at 31 Decem ber
14,015
13,620
Accumulated impairment at 1 January
4,750
4,750
Accum ulated impairm ent at 31 Decem ber
4,750
4,750
Carrying am ount at 31 Decem ber
9,265
8,870
The parent company’s investments in subsidiaries on 31 December 2025 and 2024 consist of the following:
Ow nership in %
Proportion of
voting rights in %
Nam e
Country 2025 2024 2025 2024 Business activity
Napatech Inc. USA 100 100 100 100 Sale and distribution of the Group's products
DKK'000
Result for the year
Equity
Nam e
2025 2024 2025 2024
Napatech Inc. 2,018 2,153 15,608 15,531
Parent Company Financial Statements
Annual Report 2025 68
NOTE 15 DEFERRED TAX
Statement of
financial position
Income
statement
DKK'000
2025
2024
2025
2024
Intangible assets
4,560
4,086
474
1,364
Tangible assets
(2,525)
(1,363)
(1,162)
(499)
Lease liabilities
(1,443)
(2,097)
654
(307)
Provision for expected credit loss
(592)
(626)
34
(558)
Deferred tax liability and expense
-
-
-
-
The parent company has tax losses of DKK 324,213 thousand (2024: DKK 272,886 thousand) that are available indefinitely for offsetting
against future taxable profit. In 2025, the deferred tax assets were not fully recognized in respect of these losses due to uncertainty in
timing to offset future taxable profit. Determining the amount that can be recognized for deferred tax assets is based on estimates of
the probable timing and size of future taxable profit. When assessing future profits, historical profits have been taken into account. If the
parent company was able to recognize all unrecognized deferred tax assets, the value would be DKK 72,189 thousand (2024: DKK 58,628
thousand).
NOTE 16 INVENTORIES
DKK'000
2025
2024
Consumables and components
18,095
12,080
Finished goods and goods for resale
38,583
57,796
Total inventories
56,678
69,876
Carrying value of inventories recognized at fair value
-
-
The cost of goods sold for the year is DKK 44,718 thousand (2024: DKK 36,998 thousand), which also includes movements in inventory
writedown for the year. Movements in inventory writedown are as follows:
DKK'000
2025
2024
Inventory w ritedow n at 1 January
3,090
1,908
Inventory w ritedow n for the year
593
1,322
Reversal of inventory w irtedow n
(2,520)
(140)
Inventory w ritedow n at 31 December
1,163
3,090
In 2025 DKK 593 thousand (2024: DKK 1,322 thousand) is recognized as an impairment expense. The impairment expense in 2025 is
mainly related to products with slow tradability. The impairment expense in 2024 was mainly related to the decision to end the life of a
group of products.
Reversal of inventory write-down in 2025, DKK 2,520 thousand, relates mainly to end-of-life products which has been scrapped in 2025.
Costs of the scrapped products in 2025 is DKK 3,311 thousand, which exceeds the positive effect from reversal of inventory write-down.
In 2024 the reversal of inventory write-down related mainly to products sold in 2024.
Parent Company Financial Statements
Annual Report 2025 69
NOTE 17 TRADE AND OTHER RECEIVABLES
DKK'000
2025
2024
Receivables recognized in the parent company statement of financial position:
Trade receivables
18,308
6,784
Receivables from group entities
33,945
-
Other receivables
12,350
23,762
Total current receivables
64,603
30,546
Trade receivables regarding service contracts on December 31, 2025, was DKK 661 thousand; on December 31, 2024, DKK 231 thousand;
and on January 1, 2024, DKK 11,273.
Other receivables primarily consist of inventory support payments to the manufacturing company used by the Group.
Movements in the provision for bad debts on trade receivables are as follows:
DKK'000
2025
2024
At 1 January
2,845
310
Reversed in the year
(155)
-
Change in the year
-
2,535
At 31 Decem ber
2,690
2,845
See note 25 for an aging analysis of trade receivables and a description of the credit risk.
NOTE 18 INCOME TAX RECEIVABLES
DKK'000
2025
2024
At 1 January
5,502
5,500
Income tax carry back ref und
5,500
5,502
Income tax received during the year
(5,502)
(5,500)
At 31 Decem ber
5,500
5,502
Income tax receivable relates to income tax carry back refund based on tax losses as a result of investments in development projects.
NOTE 19 ISSUED CAPITAL AND RESERVES
Information in relation to issued capital and reserves is disclosed in note 21 to the consolidated financial statements.
Parent Company Financial Statements
Annual Report 2025 70
NOTE 20 FINANCIAL ASSETS AND FINANCIAL LIABILITIES
DKK'000
2025
2024
Financial assets measured at amortized cost:
Leasehold deposits
1,636
1,579
Trade receivables
18,308
6,784
Receivables from group entities
33,945
-
Other receivables
12,350
23,762
Cash and cash equivalents
84,247
52,693
Total financial assets
150,486
84,818
Financial liabilities measured at amortized cost:
Interest-bearing loans and borrow ings
21,699
35,761
Trade payables
8,049
5,601
Other non current financial liabilities
4,652
4,540
Payables to group entities
-
185
Total financial liabilities
34,400
46,087
Carrying amounts of financial assets and financial liabilities approximate their fair value. The main part of the financial liabilities is
current/short-term. Loans and overdraft facilities are subject to variable interest rates.
NOTE 21 CONTRACT LIABILITIES
Contract liabilities relate to prepayment from customers regarding engineering services, extended warranties and technical product
support. The movements in contract liabilities are as follows:
DKK'000
2025
2024
At 1 January
4,314
7,266
Def erred during the year
1,498
3,699
Recognized as revenue during the year
(2,256)
(6,651)
At 31 Decem ber
3,556
4,314
The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) on 31 December is expected
to be recognized as revenue in the income statement as follows:
DKK'000
2025
2024
Within one year
2,212
2,764
More than one year
1,344
1,550
3,556
4,314
The remaining performance obligation expected to be recognized as revenue in more than one year primarily relates to extended
warranties.
Parent Company Financial Statements
Annual Report 2025 71
NOTE 22 LIABILITIES FROM FINANCING ACTIVITIES
2025
DKK'000
At 1
January
Non-cash
Cash flow s
At 31
December
Interest bearing loans and borrow ings
35,761
-
(14,062)
21,699
Other financial liabilities
4,540
98
14
4,652
Lease liabilities
9,530
229
(3,199)
6,560
Total liabilities from financing activities
49,831
327
(17,247)
32,911
2024
DKK'000
At 1
Non-cash
Cash flow s
At 31
January December
Interest bearing loans and borrow ings
37,360
-
(1,599)
35,761
Other financial liabilities
4,433
81
26
4,540
Lease liabilities
8,136
4,955
(3,561)
9,530
Total liabilities from financing activities
49,929
5,036
(5,134)
49,831
NOTE 23 COMMITMENTS AND CONTINGENCIES
Collaterals
The parent company (as vel as the Group) has issued a floating charge in the amount of DKK 40 million (2024: DKK 40 million) secured on
receivables, inventories, patents, and plant and equipment with a carrying amount of DKK 79.0 million (2024: DKK 82.4 million) as
collateral for loans. The parent company has, in addition, issued a charge in the shares in the subsidiary Napatech Inc.
Contingent liabilities
The parent company has engaged in a contract providing engineering services with an earn-back clause. The contingent liability regarding
this contract is the same as described in note 25 to the consolidated financial statements.
NOTE 24 RELATED PARTY TRANSACTIONS
The parent company’s related parties are the same as the Group’s. Additional information is set out in note 26 to the consolidated
financial statements.
Related parties in which the parent company has a controlling influence include the company’s subsidiary, as disclosed in note 14 to the
parent company's financial statements.
The following provides the total amount of transactions that have been entered into with the subsidiary for the relevant financial year:
Napatech Inc, USA
DKK'000
2025
2024
Income statement:
Sales to subsidiary
67,011
51,198
Statement of financial position:
Receivables from subsidiary
33,945
-
Payables to subsidiary
-
185
Parent Company Financial Statements
Annual Report 2025 72
NOTE 25 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The parent company incurs external financial liabilities and settles its transactions in currencies other than the functional currency. The
group’s financial risks are, therefore, primarily related to the parent company. Relevant additional information is set out in note 27 to
the consolidated financial statements.
Overview of expected loss on trade receivables in the parent company:
DKK'000
Loss
percentage
2025
Receivable
Expected
loss
Total
Not past due
0.9%
14,616
137
14,479
Past due for less than 30 days
2.3%
2,113
49
2,064
Past due betw een 30 and 60 days
5.1%
117
6
111
Past due after 90 days
60.2%
4,152
2,498
1,654
Total m axim um credit risk
20,998
2,690
18,308
2024
DKK'000
Loss
percentage
Receivable
Expected
loss
Total
Not past due
0.9%
4,374
41
4,333
Past due for less than 30 days
2.3%
618
14
604
Past due after 90 days
60.2%
4,637
2,790
1,847
Total m axim um credit risk
9,629
2,845
6,784
For the receivables from group entities, the assessment is based on the fact that the parent company has not historically realized any
significant losses on group receivables and the fact that the subsidiary is able to settle the receivables as they fall due. As such, as in
previous years, no impairment provision has been recognized as of 31 December 2025.
NOTE 26 EVENTS AFTER THE REPORTING PERIOD
Information in relation to events after the reporting period is disclosed in note 28 to the consolidated financial statements.
Statements Annual Report 2025 73
STATEMENT BY THE EXECUTIVE MANAGEMENT AND THE
BOARD OF DIRECTORS
ON THE ANNUAL REPORT
The Board of Directors and the Executive Board have today discussed and approved the annual report of Napatech
A/S for 2025.
The annual report has been prepared in accordance with IFRS Accounting Standards, as adopted by the EU, and
additional requirements of the Danish Financial Statements Act.
In our opinion, the consolidated financial statements and the parent company's financial statements give a true and
fair view of the financial position of the Group and the Parent Company on 31 December 2025 and of the results of
their operations and cash flows for the financial year 1 January – 31 December 2025.
Further, in our opinion, the Management's review gives a fair review of the development in the Group's and the
Parent Company's activities and financial matters, results for the year, cash flows, and financial position, as well as a
description of material risks and uncertainties that the Group and the Parent Company face.
In our opinion, the Annual Report of Napatech A/S for the financial year 1 January to 31 December 2025 with the file
name Napatech-2025-12-31-en.zip has been prepared, in all material respects, in compliance with the ESEF
Regulation.
We recommend that the annual report be approved at the annual general meeting.
Søborg, 19 March 2026
Executive Management
Kartik Srinivasan, Chief Executive Officer
Board of Directors
Lars Boilesen, Chairman Christian Jebsen
Lynn A. Comp Patty Kummrow
Shannon Poulin Svenn Tore Larsen
Zane Ball
Statements Annual Report 2025 74
INDEPENDENT AUDITORS’ REPORT
TO THE SHAREHOLDERS OF NAPATECH A/S
Report on the audit of the Consolidated Financial Statements and Parent Company Financial Statements
Opinion
We have audited the consolidated financial statements and the parent company financial statements of Napatech
A/S for the financial year 1 January – 31 December 2025, which comprise income statement, statement of
comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes, including
material accounting policy information, for the Group and the Parent Company. The consolidated financial
statements and the parent company financial statements are prepared in accordance with IFRS Accounting Standards
as adopted by the EU and additional requirements of the Danish Financial Statements Act.
In our opinion, the consolidated financial statements and the parent company financial statements give a true and
fair view of the financial position of the Group and the Parent Company at 31 December 2025 and of the results of
the Group's and the Parent Company's operations and cash flows for the financial year 1 January – 31 December 2025
in accordance with IFRS Accounting Standards as adopted by the EU and additional requirements of the Danish
Financial Statements Act.
Our opinion is consistent with our long-form audit report to the Audit Committee and the Board of Directors.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and additional requirements
applicable in Denmark. Our responsibilities under those standards and requirements are further described in the
"Auditor's responsibilities for the audit of the consolidated financial statements and the parent company financial
statements" (hereinafter collectively referred to as "the financial statements") section of our report. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Ethics Standards Board for Accountants'
International Code of Ethics for Professional Accountants (IESBA Code), as applicable to audits of financial statements
of public interest entities, and the additional ethical requirements applicable in Denmark to audits of financial
statements of public interest entities. We have also fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code.
To the best of our knowledge, we have not provided any prohibited non-audit services as described in article 5(1) of
Regulation (EU) no. 537/2014.
Appointment
of
auditor
We were initially appointed as auditor of Napatech A/S on 29 April 2014 for the financial year 2014. We have been
reappointed annually by resolution of the general meeting for a total consecutive period of 12 years up until the
financial year 2025.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements for the financial year 2025. These matters were addressed during our audit of the financial
statements as a whole and in forming our opinion thereon. We do not provide a separate opinion on these matters.
For each matter below, our description of how our audit addressed the matter is provided in that context.
Statements Annual Report 2025 75
We have fulfilled our responsibilities described in the "Auditor's responsibilities for the audit of the financial
statements" section, including in relation to the key audit matters below. Accordingly, our audit included the design
and performance of procedures to respond to our assessment of the risks of material misstatement of the financial
statements. The results of our audit procedures, including the procedures performed to address the matters below,
provide the basis for our audit opinion on the financial statements.
Revenue
recognition
The Group’s revenue primarily consists of the sales of goods that are recognized at a point in time. Engineering
services are recognized as revenue in the income statement based on the stage of completion (over time), which is
determined on the basis of the relationship between the Group’s resources spend in relation to the total estimate of
resource consumption. The degree of completion is assessed regularly and adjustments are made to the stage of
completion if deemed necessary.
Revenue recognition and measurement of the degree of completion for the Group is a matter of most significance in
our audit due to the inherent risk in the estimates and judgements made by Management in the normal course of
business as to timing of revenue and measurement of the degree of completion.
Refer to note 2 and 4 in the consolidated financial statements and to note 2 in the financial statements for the
parent company.
How our audit addressed the above key audit matters:
• Assessment of management IFRS-15 accounting memorandum regarding recognition of revenue over time.
• Test of Management’s assessment of the degree of completion of Engineering services, including test to
underlying contract, supporting documentation and evaluation of assumptions.
• Data analytical procedures on revenue including correlation analysis and activity analysis.
• Test of sales transactions during the year and recognized before and after the balance sheet date to
contracts and other supporting documentation to assess proper revenue recognition and cut-off.
• Assessment whether the applied revenue recognition criteria follow the Group’s accounting policies as
disclosed in note 2 to the consolidated financial statements.
• Evaluation of the adequacy of the disclosures provided by management in the financial statements
compared to applicable accounting standards
Statement on the Management’s review
Management is responsible for the Management's review.
Our opinion on the financial statements does not cover the Management's review, and we do not express any
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the Management's review and,
in doing so, consider whether the Management's review is materially inconsistent with the financial statements, or
our knowledge obtained during the audit, or otherwise appears to be materially misstated.
Moreover, it is our responsibility to consider whether the Management's review provides the information required
by relevant law and regulations.
Based on our procedures, we conclude that the Management's review is in accordance with the financial statements
and has been prepared in accordance with the requirements of relevant law and regulations. We did not identify any
material misstatement of the Management's review.
Statements Annual Report 2025 76
Management’s responsibilities for the financial statements
Management is responsible for the preparation of consolidated financial statements and parent company financial
statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU and
additional requirements of the Danish Financial Statements Act and for such internal control as Management
determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, Management is responsible for assessing the Group's and the Parent Company's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the
Group or the Parent Company or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs and additional requirements applicable in Denmark will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of the financial
statements.
As part of an audit conducted in accordance with ISAs and additional requirements applicable in Denmark, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Group's and the Parent Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by Management.
• Conclude on the appropriateness of Management's use of the going concern basis of accounting in
preparing the financial statements and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the
Parent Company's ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor's report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor's report. However, future events or conditions may
cause the Group and the Parent Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and contents of the financial statements, including the note
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that gives a true and fair view.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the group as a basis for forming an opinion on the
group financial statements. We are responsible for the direction, supervision and review of the audit work
performed for purposes of the group audit. We remain solely responsible for our audit opinion.
Statements Annual Report 2025 77
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the consolidated financial statements and the parent company financial statements
of the current period and are therefore the key audit matters. We describe these matters in our auditor's report
unless law or regulation precludes public disclosure about the matter.
Report on compliance with the ESEF Regulation
As part of our audit of the Consolidated Financial Statements and Parent Company Financial Statements of Napatech
A/S, we performed procedures to express an opinion on whether the annual report of Napatech A/S for the financial
year 1 January – 31 December 2025 with the file name Napatech-2025-12-31-en.zip is prepared, in all material
respects, in compliance with the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic
Format (ESEF Regulation) which includes requirements related to the preparation of the annual report in XHTML
format and iXBRL tagging of the Consolidated Financial Statements including notes.
Management is responsible for preparing an annual report that complies with the ESEF Regulation. This responsibility
includes:
• The preparing of the annual report in XHTML format;
• The selection and application of appropriate iXBRL tags, including extensions to the ESEF taxonomy and the
anchoring thereof to elements in the taxonomy, for all financial information required to be tagged using
judgement where necessary;
• Ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements presented in
human readable format; and
• For such internal control as Management determines necessary to enable the preparation of an annual
report that is compliant with the ESEF Regulation.
Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material respects,
in compliance with the ESEF Regulation based on the evidence we have obtained, and to issue a report that includes
our opinion. The nature, timing and extent of procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to
fraud or error. The procedures include:
• Testing whether the annual report is prepared in XHTML format;
• Obtaining an understanding of the company’s iXBRL tagging process and of internal control over the tagging
process;
• Evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements including notes;
• Evaluating the appropriateness of the company’s use of iXBRL elements selected from the ESEF taxonomy
and the creation of extension elements where no suitable element in the ESEF taxonomy has been
identified;
• Evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy; and
• Reconciling the iXBRL tagged data with the audited Consolidated Financial Statements.
Statements Annual Report 2025 78
In our opinion, the annual report of Napatech A/S for the financial year 1 January – 31 December 2025 with the file
name Napatech-2025-12-31-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation.
Copenhagen, 19 March 2026
EY Godkendt Revisionspartnerselskab
CVR no. 30 70 02 28
Peter Andersen Andreas Pedersen
State Authorised State Authorised
Public Accountant Public Accountant
mne34313 mne52588
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