Half Year 2026 Napatech AS Earnings Call
Speaker #1: Greetings, ladies and gentlemen, and welcome to the Napatech H1 2026 report call. Please note that this call is being recorded. All participants are currently in listen-only mode.
Speaker #1: A question-and-answer session will follow today's prepared remarks. If you'd like to ask a question during that time, please press star followed by 1 on your telephone keypad.
Speaker #1: Thank you. It is now my pleasure to introduce Klaus Kovuk, CFO. Please go ahead.
Speaker #2: Good morning. I'm Klaus Korup, CFO of Napatech. I'm pleased to welcome you all to Napatech's presentation for the second quarter and first half year of 2026.
Speaker #2: Joining me today is our CEO, Karthik Srinivasan. Our first half-year 2026 report was released earlier this morning on the Oslo Stock Exchange, and it's also available in the investor relations section of the Napatech website.
Speaker #2: For your information, a recording of this webcast will be available later today. There will be a question-and-answer session following the presentation. During and after these prepared remarks, you may submit your questions via text on the webcast page, or we can take your questions on the phone.
Speaker #2: If you would like to ask a question, please follow the instructions on this slide. Please note that this presentation contains forward-looking statements that are subject to risks and uncertainties.
Speaker #2: Our actual results may differ from those discussed in the forward-looking statements. For further information on risk factors, please see the company announcement and the slides prepared for this presentation.
Speaker #2: With that, over to you, Karthik.
Speaker #3: Thank you very much, Klaus, and hello everybody. Let me spend the next few minutes talking about the business and the momentum we are seeing across both core infrastructure and AI infrastructure.
Speaker #3: As we look at Napatech today, there are four things I want investors to take away. First, our core infrastructure business continues to provide a strong and profitable foundation for the company.
Speaker #3: Second, AI infrastructure is increasingly becoming a production story rather than simply a design win story. We have moved from engineering engagement to design win, to initial production, and now to a follow-on production order.
Speaker #3: That progression is an important proof point for us. And as volumes scale, we're building the operational capabilities and supply chain needed to support that growth.
Speaker #3: Third, we're deliberately broadening the customer and partner ecosystem around both businesses. That gives us more routes to market and, over time, should help AI infrastructure develop into a portfolio of opportunities rather than a single customer story.
Speaker #3: And finally, as inference becomes increasingly heterogeneous and distributed, networking requirements are evolving alongside the computer architectures themselves. That is precisely where programmability matters, because the infrastructure can adapt as those architectures evolve.
Speaker #3: Put simply, core infrastructure is our strength today, while AI infrastructure represents a significant growth opportunity for tomorrow. You can see that momentum in our first half results.
Speaker #3: In Q2, we generated revenue of $7.4 million, an increase of 55% year over year, with a gross margin of 67%. For the first half, revenue was $13.1 million, up 61% year over year, while unit volumes increased 20%.
Speaker #3: The difference between revenue and unit growth also reflects an important mix shift in our business. We are seeing demand move towards higher-speed, higher-value products, which carry higher average selling prices.
Speaker #3: As that mix continues to evolve, revenue growth will not necessarily translate proportionally into unit growth. This is a trend we highlighted during our full-year 2025 earnings, and we are continuing to see it play out in 2026.
Speaker #3: Importantly, this growth has been driven primarily by our core infrastructure business, while we have also begun to qualify orders for our AI infrastructure. So, we are delivering strong growth from the established business, while at the same time advancing our next growth engine.
Speaker #3: And based on our performance through the first half and our current visibility, our full-year 2026 revenue guidance remains unchanged. Here, we show the role that each of our two businesses plays in the Napatech story.
Speaker #3: Core infrastructure remains the profitable foundation of the company. First-half revenue grew 65% year over year to $12.8 million, at approximately 70% gross margin.
Speaker #3: We also added 12 design wins in this segment, which gives us additional opportunities for future revenue growth. At the same time, we're building AI infrastructure as our next growth engine.
Speaker #3: The revenue contribution today is still relatively small, as these programs progress through engineering, validation, and commercialization. But, importantly, we are beginning to see that activity translate into production orders and higher-volume deployments.
Speaker #3: As you would expect with programs of this scale and complexity, individual opportunities will progress at different rates. Our engagement with our Tier 1 OEM, for example, has moved more slowly than we originally anticipated, largely due to organizational and management changes at the customer.
Speaker #3: The technical engagement remains active, and we continue to see significant strategic value in the opportunities we are pursuing together. More broadly, our AI infrastructure pipeline continues to grow, providing multiple paths to future revenue.
Speaker #3: And as these opportunities move toward higher volume production, we're building the operational, manufacturing, and supply chain capabilities required to support that scale. We also expect to continue investing as the business grows.
Speaker #3: But importantly, we are building our AI technology for reuse and our organization for operating leverage. As AI infrastructure revenue scales, we do not expect operating expenses to increase proportionately with that revenue.
Speaker #3: Our objective is not simply to grow revenue, but to translate that growth into increasing operating leverage over time. Before I get into the numbers on this slide, I want to point out that this is a new view for us.
Speaker #3: We have historically presented our revenue geographically in this way. But as Napatech grows and our strategy evolves, we believe it is useful to give investors greater visibility into where our growth is coming from and where we are investing for the future.
Speaker #3: We see this as an additional strategic lens into the business that will help investors better understand how Napatech is developing over time. In the Americas, first-half revenue grew 27% to $7.3 million.
Speaker #3: This is also where we are making a significant portion of our strategic investment in AI infrastructure, and we are seeing strong engagement with our customers across both core and AI infrastructure.
Speaker #3: ...grew 141% to $5.9 million in the rest of the world revenue dollars, driven by strong execution across our core infrastructure customers. So, this geographic view gives you another perspective on our strategy.
Speaker #3: We are seeing strong growth across our established markets, alongside targeted investment in the areas where we see the greatest opportunity for future expansion. Let me finish my section by stepping back and talking about why we believe AI infrastructure represents such an important opportunity for Napatech.
Speaker #3: AI inference is changing rapidly. The industry is moving beyond architectures built around a single type of processor. Increasingly, AI systems are becoming heterogeneous, combining CPUs, GPUs, and specialized accelerators, each optimized for different parts of the workload.
Speaker #3: We are seeing this direction validated across the industry, including by pioneers such as NVIDIA and other leading AI infrastructure companies. Importantly, we believe this shift towards heterogeneous compute plays directly to the value proposition of Napatech's adaptive AI mix.
Speaker #3: In this new world, established leaders will increasingly coexist with a new generation of specialized AI companies, each bringing different compute architectures and capabilities. And the more diverse that compute environment becomes, the more important—and more complex—the infrastructure connecting it becomes.
Speaker #3: The challenge is no longer simply about how much compute you have. It is also about how efficiently you can connect that compute and move data between it.
Speaker #3: That has a direct impact on performance, utilization, and ultimately, the economics of AI inference. We are seeing these architectures evolve rapidly across the industry, including an increasing focus on high-performance networking technologies such as RDMA.
Speaker #3: And this is where our programmability becomes particularly important. Our adaptive AI mix is built on programmable architectures. As processors, accelerators, networking protocols, and workloads evolve, our technology can adapt with them.
Speaker #3: Our goal is simple: help our customers move data more efficiently, keep their expensive AI compute better utilized, and ultimately improve the economics of AI inference.
Speaker #3: And as AI infrastructure becomes more heterogeneous and more complex, we believe the value of that programmability increases, further differentiating Napatech and strengthening the moat around our adaptive NIC architecture.
Speaker #3: That combination of adaptability and programmability is at the heart of the AI infrastructure business we're building. We believe this growing relevance, combined with the differentiation of our programmable architecture, is an important part of the long-term value creation potential for Napatech.
Speaker #3: With that, I'll hand it back to Klaus to take you through our financial performance and outlook in more detail.
Speaker #2: Thank you, Karthik. We delivered strong results, bringing revenue growth and improved operating performance in Q2 while maintaining disciplined cost control. As Karthik mentioned earlier, our revenue in Q2 was $7.4 million, up 55% compared to Q2 last year.
Speaker #2: In Danish kroner, revenue increased 52% to DKK 48.1 million. Our core infrastructure segment is thriving, showing profitability in Q2, while the activity in the AI infrastructure was driven by early customer qualification orders coming at low margins due to the limited quantities produced.
Speaker #2: When production increases, the unit cost margin will decrease and margins will improve. Our gross margin was 67.3%, slightly above Q2 last year and within our guidance range.
Speaker #2: For the first half of the year, revenue was DKK 84.7 million, up 53% compared to last year, and gross margin was 68.3%, essentially in line with last year.
Speaker #2: Staff costs and other external costs were DKK 41.2 million in Q2, down 3.4% compared to Q2 '25, reflecting continued cost discipline. EBITDA improved significantly to a negative DKK 6.6 million compared to negative DKK 19.6 million in Q2 last year.
Speaker #2: So, while we are still investing in the business, the operating leverage is clearly improving as revenue scales. Free cash flow in Q2 was negative DKK 35.3 million, mainly driven by working capital movements during the quarter.
Speaker #2: Net cash flow from operating activities was negative DKK 32.1 million in Q2. The main driver was a DKK 26.1 million negative working capital adjustment, primarily reflecting backloaded invoicing in Q2 and a ramp-up of inventories to support expected customer demand.
Speaker #2: For the first half-year, net cash flow from operating activities was negative DKK 36.9 million, compared with negative DKK 44.3 million in the first half-year of '25.
Speaker #2: Free cash flow was negative DKK 41.1 million, which is an improvement compared with negative DKK 50.6 million in the first half of last year.
Speaker #2: Net working capital increased from around DKK 73 million at the end of Q1 to around DKK 99 million at the end of Q2, due to the increase in inventories and receivables as mentioned.
Speaker #2: Cash and cash equivalents were DKK 62.7 million at the end of Q2, and including on-ground committed credit facilities of DKK 21.6 million, total available liquidity was DKK 84.3 million.
Speaker #2: Danish kroner. The year-to-date cash development reflects both the improved operating performance and the higher working capital tied to inventory and customer timing.
Speaker #2: We continue to manage the business with a strong focus on cost discipline, cash preservation, and ensuring that working capital supports expected production ramps and customer demand.
Speaker #2: Our revenue guidance for the full year 2026 is unchanged at DKK 200 to 240 million, corresponding to approximately $32 to $38 million USD.
Speaker #2: And as Karthik mentioned, we are seeing demand move towards higher speed, higher value products, which carry higher average selling prices. As that mix continues to evolve, revenue growth will not necessarily translate proportionally into unit growth.
Speaker #2: Furthermore, we are expecting lower-than-originally-anticipated units sold within AI infrastructure in 2026. This leads us to a lower unit guidance for expected units sold in ’26 to the range of 7,700 to 9,700.
Speaker #2: We maintain our gross margin guidance of 60% to 70%, though you should note that in the next quarters, we expect gross margins to be lower following a higher share of AI infrastructure revenue coming at a lower margin.
Speaker #2: And increased component prices here, especially memory. Staff expenses and other external costs are expected to be DKK 170 to 180 million, while staff costs transferred to capitalized development costs are expected to be DKK 5 to 8 million. Both are unchanged.
Speaker #2: At the midpoint of our guided range, EBITDA would be negative at around DKK 25 million for the full year. And as always, our outlook remains subject to normal risks, including currency movements, market uncertainty, trade barriers, and supply chain volatility.
Speaker #2: Which we continue to monitor closely. As we wrap up today's presentation, we would like to invite you to visit Napatech at one of these upcoming events.
Speaker #2: Our full-year event plan is shown online at the link provided. If you happen to be in one of these great cities during the coming period, we would love to meet you in person.
Speaker #2: With that, we are now ready for the Q&A. Operator, we are now ready to take the first question.
Speaker #1: Thank you. We are now opening the floor for the question and answer session. If you'd like to ask a question, please press star, followed by one, on your telephone keypad.
Speaker #1: Press star followed by one on your telephone keypad. We will pause for a brief moment to wait for the questions to come in. Your first question comes from the line of Christopher Bjornsson of DNB.
Speaker #1: Your line is now open.
Speaker #3: Hey, good morning, and thanks for taking my question. So, first of all, on the core infra segment, it seems to be progressing well. We'd just love to hear Karthik's reflections on that business now after being in the company for a while.
Speaker #3: I think previously, at least with the previous management, there was always more excitement about the AI infra segment, but now it seems the core infra is also booming. I think some of the traditional customers within that space, for instance within trading and financial services, have kind of surfaced as some of the big buyers of AI compute—in the billions of dollars—from the likes of NeoClouds and new acceleration companies.
Speaker #3: So, do you kind of, Karthik, do you see an opportunity for you guys to be attached to those kinds of ramps within the more traditional space, or is that something you're necessarily playing in?
Speaker #3: Just your reflections on the core infra segment going forward—if it's exciting or not—to be appreciated.
Speaker #4: Hey, good morning, Christopher. Thank you very much, as always, for your question. We do feel the core infrastructure market has got a huge SAM.
Speaker #4: And as part of that SAM, we at Napatech have been participating in that SAM in a fairly limited capacity until now, with a single product that we call CAPTURE.
Speaker #4: And in that space, the market signals are positive, and we see a resurgence in demand there, as reflected in our earnings. As the core infrastructure market is recovering and the demand signals are growing, we remain excited about the core infrastructure space as well.
Speaker #4: Of course, the AI infrastructure market doesn't need any explanation. It's very, very exciting for everybody. It's dynamic in nature, and we are very well placed as a company with our programmability to participate in that success.
Speaker #4: But at the same time, our focus remains unchanged on the core infrastructure side as well. That's a market that we understand; that's a go-to-market that we understand. The customers and the partners are something that we have worked with for many years.
Speaker #4: So Christopher, the core infrastructure market remains a focus area for us, over and above what we're doing in the AI infrastructure space.
Speaker #3: Well, just a double question on the AI inference and AI infrastructure space. So, I think first of all, on the current lead customers who have given you these initial orders—maybe you can't say too much—but I think last quarter you gave an update on how you're developing or progressing with their next-generation efforts.
Speaker #3: They have new products coming out, new architecture. Just, how do you see yourself being positioned to have a role there as they move to a completely different architecture on their main kind of compute side?
Speaker #3: And then secondly, on AI infrastructure, just any update or more granularity on other opportunities within AI infrastructure—just how those are progressing? What kind of roles are you seeing there, and if you see any timing there, you could comment on beyond the matrix.
Speaker #3: That would be appreciated as well.
Speaker #4: Awesome. Sounds good. Yeah. On our leading AI infrastructure customer—as you know—there’s a lot of industry information available, not just on how their individual next-generation architecture is evolving, but also, in the last six months or so, heterogeneous compute has become pretty much commonplace.
Speaker #4: Anytime you hear AI inference, you hear heterogeneous compute in there. The role that Napatech plays across both of these individually, within our leading customer and their next generation, as well as how we participate in the heterogeneous—they're kind of related, Christopher, in the sense that we went from a dedicated kind of offering for their first gen to a more industry RDMA-specific offering that we are working on.
Speaker #4: And that is an engagement that we are currently doing with our customers, both across the lead customer as well as the industry. The industry is gravitating towards RDMA, and you can see in any journal that now there are four or five different kinds of RDMA technology.
Speaker #4: There is Rocky, and then there is UEC. There is MRC, and then, most recently, Meta announced Meta Rocky. So that's a very dynamically changing landscape.
Speaker #4: And the underlying programmable architecture that Napatech has now becomes an extremely important weapon for us in playing in this field, as this RDMA is changing so dynamically and it becomes a differentiation for us.
Speaker #3: That's super helpful. Thank you. And then on the other opportunities, anything there? Anything material you can disclose in terms of incoming or outgoing calls or nature of opportunities?
Speaker #4: Yeah. So, Christopher, you have to assume that our pipeline is something that we are actively working on. But right now, it's a little too soon for me to come in and provide you with any sort of guidance in terms of names or numbers.
Speaker #4: But rest assured that as soon as I am able to do that, you will know.
Speaker #3: All right. Thanks. I'll hop in the back of the queue.
Speaker #4: Thank you, Christopher.
Speaker #2: Again, if you'd like to ask a question, please press star followed by one on your telephone keypad. That's star, followed by one, on your telephone keypad.
Speaker #2: Your next question comes from the line of Christopher Bjornsen of DNB. Your line is now open.
Speaker #3: Yeah, sorry.
Speaker #4: I'm back in the line just to confront again.
Speaker #3: That's great. I just have to ask, on the cash flow and the balance sheet—kind of a housekeeping question. You reflected somewhat on it, but just how do you see the runway, and how do you see the working capital requirements and so on into the second half and beyond?
Speaker #3: I see your current cash. Negative cash flow is driven by working capital. To a large extent, it seems like you could be on an operating free cash flow basis into positive territory in the second half at some point.
Speaker #3: So, just some reflections on how you see the progression through the second half of the year.
Speaker #4: Yeah, thank you, Christopher. And you're absolutely right. So, the reason why we had this cash burn in Q2 was that we built up inventory to meet the demand here in the second half of the year.
Speaker #4: And then Q2 was also backloaded. So we did a lot of the invoicing in June, and therefore we'll first receive the payments for those in July or August.
Speaker #4: So, as we go into the second half of the year, our expectations currently are that we will exceed $10 million in revenues in the coming quarters.
Speaker #4: And thereby, we should be close to cash flow neutral, and hopefully even cash flow positive, also in the next two quarters.
Speaker #3: Great. Thanks. That's all.
Speaker #4: Thank you.
Speaker #2: Your next question comes from the line of Weinstein Mogart of ABG. Your line is now open.
Speaker #5: Good morning. I have started with a question on the tier-one server manufacturer. You're saying the ramp-up there goes a bit slower. I know it's very difficult to comment on specific customers.
Speaker #5: Are there any kind of things you can share about the progress with that customer? You're still working on several projects with that customer. You have stated previously it's six ongoing projects, and do you still see the opportunity there as big as it has been previously?
Speaker #4: Hey, good morning, and thank you for your question. Absolutely, undoubtedly, the engagement at the technical level remains extremely strong. I think, as I mentioned the last time, these big companies have a very disciplined, multi-phased approach, going from qualification to production.
Speaker #4: And these big companies, unfortunately, also face a lot of management changes, and that's what we are in the middle of. So, this is nothing more than just a little bit of a delay in the progress, but it doesn't take anything away from the activity or the size and the scope of the overall effort.
Speaker #5: That's very good to hear. And on the core infrastructure segment, it's good to see that this is also performing very well—growing strongly there.
Speaker #5: In the first half of the year, if we look into 2027, what's your visibility for the core infrastructure segment in 2027? Do you have new design wins to support continued growth in 2027?
Speaker #5: Should we kind of expect it to continue to grow at the rates we are currently seeing, or is this a bit of extraordinary growth this year in that segment?
Speaker #4: Yeah, good question. How much the core infrastructure grows by in 2027—it's a little too early for me to comment on. I'm pretty sure over the next quarter, or maybe a quarter and a half, I can get you better visibility into the size and the rate of growth.
Speaker #4: But I can tell you, directionally, we are expecting growth, of course, in our core infrastructure and, needless to say, in the AI infrastructure in a meaningful way next year.
Speaker #4: So we are investing in, and will continue to invest in, both of these segments because we fully expect both of them to grow. How much they grow by, Einstein will come back and give you the number.
Speaker #5: Okay, thank you very much. That was all of my questions.
Speaker #4: All right. Thank you. I think there's one more question in the line, right, operator?
Speaker #2: Yes. Our next question comes from the line of Lars Knudsen, a private investor. Your line is open.
Speaker #5: Yeah, hello. Thank you for taking my question. So, I think the CEO of Dmatrix gave an interview, I think, a few days ago.
Speaker #5: Where he talked about that they’re deploying 1 to 2 megawatts of compute this year, and that that will grow to 30 to 50 megawatts of compute in 2027.
Speaker #5: I mean, I'm a bit puzzled how to read that, because just look at it—it's like a 25x in terms of compute, i.e., also cards.
Speaker #5: Is that also something that you recognize in him when you have discussions with DMatrix?
Speaker #4: Yeah. Thank you for the question, Lars. The conversion of the wattage of these data centers at the compute architecture teams' plan and how that could get converted actually into the networking component, which is what Napatech provides—the math or the arithmetic there, Lars, is not that easy.
Speaker #4: What we have visibility to is a direct forecast and POs that we get from our customer, and that's what we plan based on. And then, of course, we have some level of buffer so that we can plan our supply chain.
Speaker #4: We were obviously also monitoring what some of these public statements are, and we'll start building our models over time to see how the exact wattage of the data center converts to forecasting units and potentially revenue for us going forward.
Speaker #4: But still, again, this is such a dynamic business right now. The direct conversion of a component, such as what Napatech provides, to this landscape—and getting that equated to the bigger picture of what the megawatts or gigawatts conversion is—is a little difficult today.
Speaker #5: Yeah, thanks. And second, just on the order pattern from Dmatrix, do you have any insights into the two orders that you have received?
Speaker #5: Are they for different customers? Is it one customer scaling? And, I mean, we are very early in this journey, but the first order was for, like, Q3, Q4.
Speaker #5: The second order was for Q1. Will the next order—will that be for Q1 2027, or will it be for Q2 2027? How do you see the order pattern, and what insights do you have into which customers they're deploying at?
Speaker #4: Yeah, Lars, another question where the answer is tough to predict. All we know is the first order that came in—that's for delivery in 2026.
Speaker #4: And the second order that we announced last month was for starting in Q1 2027. That's pretty much the information that we've been directly provided. Everything else—all the other questions that you asked—I don't have the answers to.
Speaker #5: Okay. Okay. Thank you.
Speaker #4: Thank you, Lars.
Speaker #2: Thank you. I'd now like to hand the call back to the Napatech team to address the web questions.
Speaker #5: Thank you. And we got a question from Anders Knudsen—actually, a couple of questions—so I'll just read them out loud here. Congrats on the strong revenue growth.
Speaker #5: Could you add some more detail on how the memory cost increase impacts the gross margin? How big of a bill of material is memory? And I think the answer to that one, Anders, is that it's a quite significant part of the bill of material.
Speaker #5: And maybe let me just give a quick example. It's a hypothetical example, but it gives some flavor to it. So let's say that we sell a unit at $5,000.
Speaker #5: We have a margin of 70% on that $5,000, so that's $3,500 in gross profit margin. Therefore, the COGS is $1,500.
Speaker #5: If the COGS suddenly increases to $3,000 due to increased memory cost, and we keep the price at $5,000, then our margins would decrease to around 40%.
Speaker #5: If we wanted to keep the margin of 70%, then we needed to sell the product instead of for $5,000, at $10,000. So, double up the price.
Speaker #5: And that's, of course, where it gets a little bit difficult, because customers, they also know that memory price is not increasing that much. So they need to pay double the price for the product they had before.
Speaker #5: But what we are doing is, of course, to get the highest price we can to achieve the best possible gross profit margin for Napatech.
Speaker #5: And then there is a second question here. Given the acceleration in design wins, how big is your pipeline nowadays? And maybe Karthik, you want to answer that one.
Speaker #4: Yeah. So the pipeline nowadays, both on the core infrastructure side—where we announced the 12 new design wins—as well as on the AI side, is a growing number for us.
Speaker #4: For 2026, the design wins that we announced this year obviously will not have an impact, but the prior announcements that we made for design wins—those obviously come into play for 2026.
Speaker #4: The question is: what are the core levers to hit the top end of the guidance? It really is—the demand signals are very clear for us.
Speaker #4: It's now just a matter of how we manage our deliveries, how we manage the pricing, and the guidance that we have provided. I think that we're still holding on to that guidance.
Speaker #4: We'll manage it within that range.
Speaker #5: Yeah. And we are making sure that with the product mix, we expect that we have enough in our inventory to meet the demand to end in the high end of the guidance.
Speaker #4: Yeah. One thing I will reiterate just because the question is in that space. I know we announced that the unit count forecast or the guidance is come down, but I do want to emphasize that this is coming at a the lesser units do come at higher value, higher ASP, for NAPATECH, which we see as positive news.
Speaker #4: It's because it's now our customers are moving to a higher speed of Ethernet, higher value of our products. And that's kind of is the reason why despite the forecast of units going down, we are not changing the revenue guidance in here at all.
Speaker #4: So I do want all of the investors to notice that this revenue is being attached to a higher value product that Napatech is shipping.
Speaker #5: Good. And then there's a question from Tor Voland. On slide 11—sorry—you say AI infrastructure products come with a lower gross margin. Can you give us a sense of what margin we should be modeling on the production orders, and whether that improves as volume scales?
Speaker #4: Yeah. So the exact number of what the margin will be, we will get to know that because there's still some level of volatility in pricing.
Speaker #4: Owing to this, the memory changes, and some of the other pricing of our components. And as we scale and we’ll have more visibility, Tori, we’ll come back and give you some level of guidance in here.
Speaker #4: But our objective within Napatech, of course, is to continuously improve margins in every possible way we can. And those come from different aspects—managing our supply chain well, managing the value that we add into our solution that dictates the pricing.
Speaker #4: So those will forever be continuous efforts by Napatech to improve the margin in this space. But how exactly we model it with those numbers, we will get a little bit more educated over time.
Speaker #5: Thank you. And I think that was the last question we had in the comment space. Operator, you can confirm we don't have anyone on the line either, right?
Speaker #2: We don't have any questions at this moment from the conference lines.
Speaker #5: Perfect. I think that wraps up the Q2 webcast. Thank you, everyone, for participating, calling in, and also for sending in your questions. Thank you very much.
Speaker #5: Sorry, there's just come one more question in at the last minute here from Benjamin. Arne, hi. Let's say you get an order of 20,000 units instead of 2,000 units like you have today.
Speaker #5: Would you be able to deliver on this type of big orders?
Speaker #4: Hey, thank you, Benjamin, for that fantastic question. Would love to get that order. But the short answer is yes. We have been anticipating a big, explosive growth in the AI infrastructure space and have been planning for our supply chain, both across our contract manufacturers as well as the different vendors in the landscape that we have in our supply chain.
Speaker #4: So, we are gearing up for this level of growth—at this order of magnitude.
Speaker #5: And maybe I should just comment from a liquidity point of view. What we would like, of course, is to get these big orders, but maybe have them grow a little bit gradually so we can also follow it from a liquidity point of view with our working capital, because there are, of course, some commitments we need to make there.
Speaker #5: And there, we need to figure out how to finance if we need to produce such a big order—potentially by getting prepayments or something similar.
Speaker #5: Good. I think that's the last question then. So, I'll just thank everyone again for attending. Operator, I think we are ready to close the call.
