Napatech: Better CF driven by lower capex - ABG

Q1: Sales 9% above, gross profit 1% above
Reiterates '23 guidance: 20% y-o-y growth on midpoint
Recent design wins could start to materialise in H2


Q1: Better cash flow driven by lower-than-expected capex

Napatech delivered Q1 sales of DKK 37m, down 29% y-o-y as enterprise pipeline orders continued to be affected by customers' buying behaviour. However, this was9% better than our estimate of DKK 34m. The gross margin came in at 55%, below ABGSC at 60% and consequently gross profit came in 1% above ABGSC. The lower gross margin is explained by extraordinary component costs related to components purchased in 2022, but note that the margin is up from 51% in Q1 last year which was affected by a hardware-only order. Operating costs were DKK 38m, i.e. slightly below our estimate of DKK 39m. This resulted in an EBITDAC of DKK -17.9m vs ABGSC at DKK -19m. Furthermore, capex in the quarter was DKK 6.1m, below our estimate of DKK 11m. Consequently, EBITDA-capex came in at DKK -18.9m vs. our estimate of DKK -24m. Operating cash flow was also slightly better at DKK 23.3m vs ABGSC at DKK 22m. Note that the postiive WC change is driven by the Intel payment received in January.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/Napatech/Equity-research/2023/5/napatech---better-cf-driven-by-lower-capex/