The Duckhorn Portfolio(US:NAPA)2025-08-26 08:00Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $4.8 million, representing a 43% increase year-over-year and a 41% increase compared to Q1 2025 [7][40] - Gross margins for Q2 2025 were 67%, up from 65% in Q2 2024, while first half gross margins were 68.4% compared to 68.2% in 2024 [7][41] - Q2 EBITDA was negative DKK 19.6 million, an improvement from negative DKK 27.4 million in Q2 2024 [8][42] - Free cash flow in Q2 was negative DKK 21.2 million, an improvement of DKK 23.4 million compared to Q2 2024 [8][9] - Cash and cash equivalents at the end of Q2 2025 amounted to €133.4 million, compared to €103.2 million at the end of Q2 2024 [43] Business Line Data and Key Metrics Changes - The company reported significant progress in its capture business and design win goals, aiming to deliver 60,000 to 80,000 units annually at peak production [6][9] - The partnership with Intel Altera is driving growth in high-volume designs, particularly in AI and cloud services [10][12] Market Data and Key Metrics Changes - The demand for advanced network interface cards (NICs) is expected to grow significantly, with projections indicating a market size of nearly $11 billion in the next five years [20][21] - The mass market for advanced NICs is anticipated to approach $6 billion by 2029, driven by the need for AI, cloud, and mobile services [21][22] Company Strategy and Development Direction - The company is focused on transforming its business to become a leader in the mass market for network interface cards, leveraging partnerships and design wins to drive growth [6][10] - The strategy includes reducing net working capital through better inventory management and payment terms, anticipating a shift towards large volume orders [44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Q3 2025, expecting revenue to surpass both Q2 2025 and Q3 2024 [9] - The company is confident in its financial outlook, driven by increasing unit sales and high gross margins due to strong software components in its products [47] Other Important Information - The company successfully completed a private placement capital raise of NOK 210 million to finance growth opportunities [9] - Recent design wins include partnerships with dMatrix and Broadcom Symantec, focusing on AI infrastructure and cybersecurity solutions [12][35] Q&A Session Summary Question: Have you received first orders from myrtle.ai for Volo? - The product has been launched, and while orders have not yet been received, the company is prepared to fulfill them once they come in [51] Question: Can you quantify the expected revenue contribution from dMatrix in 2026? - Each data center could yield between 2,500 to 25,000 units, but exact predictions are challenging as the product is not yet ready [53][55] Question: What is the revenue potential of the first 5G core deployment? - The initial deployment will require a three-digit number of units, expected to be delivered primarily in Q4 and Q1 [56] Question: What are the key risks in scaling the dMatrix partnership? - The company is confident in its ability to deliver on time and does not foresee any significant bottlenecks at this stage [57][58] Question: How much of the expected volume in 2026 will come from traditional SmartNIC business versus dMatrix? - The guidance for 2026 includes around 5,000 to 6,000 units from existing business, with the remainder expected from dMatrix [61] Question: When do you expect to receive the first commercial production order from dMatrix? - Discussions regarding forecasts for 2026 will take place before the final product delivery in November this year [62]