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Navitas Semiconductor Corp (NVTS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $14.5M, down 29% year over year and up 3% sequentially; GAAP loss from operations improved to $(21.7)M; non-GAAP loss from operations improved to $(10.6)M .
  • Management pivoted focus toward AI data centers and energy infrastructure, announced a collaboration with NVIDIA on next-gen 800V data centers, a new 200mm GaN foundry partner (Powerchip), and raised ~$100M (net $97M) to fund development; cash rose to $161.2M .
  • Q3 2025 guidance calls for revenue of $10.0M ± $0.5M, non-GAAP gross margin ~38.5% ± 50 bps, and non-GAAP OpEx ~$15.5M, reflecting China tariff risks and a more selective mobile strategy; weighted average share count expected ~214M .
  • Consensus estimates from S&P Global for Q2 and Q3 were unavailable at query time; compare trajectory vs prior quarters and company guidance. S&P Global consensus unavailable.

What Went Well and What Went Wrong

What Went Well

  • Strategic repositioning: “We are sharpening our focus on AI data centers and energy infrastructure… We raised $100 million… and announced a new 8” lower-cost GaN foundry relationship… to address this fast growing market” .
  • AI data center ecosystem momentum: NVIDIA selected Navitas to collaborate on next-gen 800V data centers across three conversion stages, with final engineering samples expected in Q4 and volume production in 2027 .
  • Liquidity strengthened: Cash and cash equivalents increased to $161.2M on capital raise; no debt; OpEx reductions sequentially improved non-GAAP operating loss .

What Went Wrong

  • Top-line pressure and mix headwinds: Revenue fell to $14.5M vs $20.5M year over year, driven by lower China EV/industrial demand and tariff uncertainty; GAAP gross margin was negative due to amortization and reserves .
  • China SiC inventory reserve: ~$3.174M reserve on U.S.-produced SiC given tariff risk, weighing GAAP gross margin; non-GAAP GM held at 38.5% .
  • Near-term outlook downshift: Q3 revenue guidance $10.0M ± $0.5M reflects tariff risk and de-emphasis of lower-margin mobile; margins steady but scale delayed to late 2026/2027 for 800V AI data center ramp .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$20.5 $14.0 $14.5
GAAP Loss from Operations ($USD Millions)$(31.1) $(25.3) $(21.7)
Non-GAAP Loss from Operations ($USD Millions)$(13.3) $(11.8) $(10.6)
GAAP Diluted EPS ($USD)$(0.12) $(0.09) $(0.25)
Non-GAAP EPS ($USD)$(0.07) $(0.06) $(0.05)
GAAP Gross Margin (%)19.7% 9.1% (11.8)%
Non-GAAP Gross Margin (%)40.3% 38.1% 38.5%
Cash & Equivalents ($USD Millions)N/A$75.1 $161.2

Notes:

  • GAAP gross margin was negative in Q2 2025 largely due to amortization of intangibles and the China SiC inventory reserve; non-GAAP excludes amortization, SBC, reserves .
  • Weighted average shares increased following ~20M shares issued (net proceeds $97M) in Q2; Q3 share count guided to ~214M .

Segment breakdown: The company does not report by segment; commentary indicates GaN mobile/consumer/appliance, SiC for EV/industrial/energy, and growing AI data center content .

KPIs (selected non-GAAP):

  • Non-GAAP OpEx: $16.1M in Q2 (R&D $9.2M, SG&A $6.9M), down from $17.2M in Q1 .
  • Non-GAAP GM: 38.5% in Q2 vs 38.1% in Q1 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q2 2025$14.0–$15.0 Actual: $14.5 Met guidance
Non-GAAP Gross Margin (%)Q2 202538.5% ± 50 bps Actual: 38.5% Met guidance
Non-GAAP OpEx ($USD Millions)Q2 2025~$15.5 Actual: $16.1 Slightly above (one-time R&D)
Revenue ($USD Millions)Q3 2025N/A$10.0 ± $0.5 New; Lower
Non-GAAP Gross Margin (%)Q3 2025N/A38.5% ± 50 bps New; Maintained
Non-GAAP OpEx ($USD Millions)Q3 2025N/A~$15.5 New; Lower seq.
Weighted Avg Shares (Millions)Q3 2025N/A~214 New

Drivers of change:

  • Revenue guidance lowered due to China tariff risks impacting SiC and a more selective approach to lower-margin mobile .
  • GM steady given consistent mix in near term; OpEx trending down with streamlining .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
AI/Technology initiativesProgression from 2.7kW to 12kW PSUs; 40 DC wins growing to 75; GaN/SiC content required for >8.5kW; design wins $450M lifetime across markets NVIDIA collaboration on 800V HVDC; three-stage content; samples in Q4; production 2027; TAM ~$2.6B by 2030 Strong acceleration; ecosystem validation
Supply chain/manufacturingQ1: ATM authorization; tight cash management; U.S. SiC fab origin risk if tariffs change; no debt New 200mm GaN partner Powerchip; TSMC 6” continuity with 2-year+ supply; 80% more die per wafer at 8” Capacity and cost efficiency improving
Tariffs/macroOngoing EV/solar/industrial softness; SiC minority of revenue but majority sold into China; monitoring “country-of-origin” definition China SiC inventory reserve ~$3.2M; Q3 revenue lowered due to tariff risks Near-term headwind intensifies
Product performanceGaN BDS production release; GaNSafe auto-qualified (Q101); unprecedented reliability (100 ppb) Xiaomi 90W charger; continuing leadership in high-end mobile GaN High-end mobile sustained; mainstream de-emphasized
Regional trendsMobile adoption rising in China OEMs; broader pipeline diversified Deprioritizing lower-margin China mobile (45–65W) while focusing on ultrafast 100W+ Mix shift to premium/enterprise
R&D executionStreamlining OpEx; Q1 non-GAAP OpEx $17.2M Sequential OpEx reduction to $16.1M; one-time R&D spend; further reductions planned Cost discipline improving
Regulatory/legalRisk factor disclosures; monitoring tariff origin rules Explicit cautionary statements on new market uncertainties; pipeline/design-win caveats Continued risk emphasis

Management Commentary

  • “We are sharpening our focus on AI data centers and energy infrastructure… We estimate that GaN and SiC technologies can support a 100x increase in server rack power capacity… $2.6B market potential by 2030.” — Gene Sheridan, CEO .
  • “We currently expect revenue of $10.0 million ± $0.5 million… adverse impacts from China tariff risks… deprioritize lower margin China Mobile business… transition toward AI data center and energy infrastructure markets.” — Todd Glickman, CFO .
  • “By bringing up eight inches, that gets you 80% more die per wafer… we’ll have a lot of capacity, no shortages or supply chain issues.” — Gene Sheridan on Powerchip .
  • “We still have our same long-term margin model north of 50 points… AI data center and the energy infrastructure markets should be very high value.” — Gene Sheridan on margin trajectory .

Q&A Highlights

  • Transition trajectory: Expect “softer quarters” over next 1–2 quarters as mobile dependence is reduced; layering in 48V data center wins through 2026; 800V data center opportunity heavily 2027 .
  • Mobile strategy: De-emphasizing mainstream 45–65W China chargers; refocus on ultrafast 100W+ premium chargers (e.g., Xiaomi 90W) with better margins; revenue impact near term .
  • Supply and foundry transition: Mid-voltage GaN sampling next quarter from Powerchip; high-voltage GaN continues from TSMC with 2-year supply; migration expected in late 2026; no supply constraints .
  • Tariff risk quantification: China SiC tariff risk and inventory reserve largely a Q3 impact; equal-weight drivers include tariff headwinds, mobile strategy shift, and delayed ramps amid industry softness .
  • Margin outlook: Non-GAAP GM guided flat at ~38.5% near term; step-up requires revenue inflection and mix shift toward AI/energy .

Estimates Context

  • Wall Street consensus estimates via S&P Global for Q2 2025 and Q3 2025 were unavailable at query time. S&P Global consensus unavailable.
  • Implications: In absence of external consensus, the company met its Q2 guidance on revenue and non-GAAP GM and guided Q3 revenue materially lower; sell-side models likely need to reduce near-term revenue and maintain gross margin assumptions given mix, while revisiting longer-term margin targets (>50%) as AI data center programs progress .

Key Takeaways for Investors

  • Near-term caution: Revenue will likely trough in Q3 on China SiC tariff risk and intentional mobile mix shift; non-GAAP GM stable (~38.5%); OpEx down to ~$15.5M; liquidity strong at $161M cash and no debt .
  • Strategic pivot to AI: NVIDIA collaboration and three-stage content (SST, 800V→48V DC/DC, 48V→processor DC/DC) position Navitas for materially higher content and margins in 2026–2027; final samples in Q4; supplier selections in 2026 .
  • Manufacturing leverage: 200mm GaN with Powerchip and continuity at TSMC create capacity and cost advantages (80% more die/wafer), supporting margin expansion as AI ramps .
  • Mobile recalibration: Focus on 100W+ premium chargers improves margin profile but reduces near-term revenue; mainstream China 45–65W exposure curtailed .
  • Risk management: China tariff origin rules and market cyclicality remain key variables; management disclosed inventory reserve and risk factors clearly—monitor policy changes and regional mix .
  • Timeline discipline: Expect 48V data center wins to contribute in 2026, with 800V systems primarily 2027; watch for Q4 engineering sample milestones and 2026 design selections .
  • Trading setup: Momentum catalysts include AI ecosystem announcements, Q4 sample deliveries, and additional high-end mobile wins; stock likely sensitive to tariff headlines and data center qualification updates .