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Navitas Semiconductor Corp (NVTS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $10.1M, down 30% QoQ and 53% YoY; GAAP gross margin was -2.0% while non-GAAP gross margin held at 38.7%, reflecting amortization and stock-based comp adjustments .
  • Management launched “Navitas 2.0,” pivoting away from low-margin mobile/consumer toward high-power markets (AI data centers, performance computing, grid/industrial), with NVIDIA recognition in the 800V DC AI factory ecosystem and new 100V GaN FETs and 2.3–3.3 kV SiC modules sampling .
  • Q4 2025 guidance resets revenue to $7.0M ± $0.25M (lowered vs Q3), while non-GAAP gross margin is maintained at ~38.5% and OpEx trimmed to ~$15.0M; management describes Q4 as the revenue floor with sequential growth and margin expansion through 2026 driven by mix shift to high power .
  • Cash remained strong at $150.6M with no debt, providing runway to execute the pivot (burn-rate ~$10–11M/quarter discussed on the call), and channel inventory/distribution is being streamlined to align with high-power focus .

What Went Well and What Went Wrong

What Went Well

  • Non-GAAP gross margin resilient at 38.7% (up vs Q2 at 38.5%), aided by favorable mix; Q3 OpEx cut to $15.4M non-GAAP, showing discipline and alignment with transformation plan .
  • Strategic recognition: “Navitas has been recognized by NVIDIA as a power semiconductor partner for its next-generation 800V DC architecture in AI factory computing,” validating grid-to-GPU positioning and technology breadth in GaN and high-voltage SiC .
  • Product roadmap execution: introduction of new 100V and 650V GaNFast FETs and sampling of 2.3kV/3.3kV SiC modules for energy storage/grid customers, aligning with high-power growth vectors .

Quotes:

  • “This is a transformation, not an evolution…Pivot from a mobile and consumer foundation towards high-growth, high-power markets.” — Chris Allexandre, CEO .
  • “Resetting Q4 2025 revenue baseline…guiding Q4 as the floor with expected sequential growth and margin expansion through 2026 driven by high-power revenue growth.” — Earnings call presentation .
  • “We believe that Q4 will represent the bottom for revenue… enabling consistent, gradual revenue growth throughout 2026.” — Todd Glickman, CFO .

What Went Wrong

  • Revenue contracted sharply: $10.1M vs $14.5M in Q2 and $21.7M in Q3 last year; GAAP gross margin turned negative (-2.0%), highlighting amortization impact and ongoing pricing/tariff headwinds .
  • Non-GAAP operating loss widened sequentially ($11.5M vs $10.6M in Q2) as cost reductions did not fully offset revenue decline; Q4 guide implies another step down in revenue from mobile exit and channel inventory cleanup .
  • China-related pressures (mobile commoditization, tariff risk on SiC) contributed to reduced revenue and strategy to deprioritize low-margin segments and streamline distribution, creating near-term pain before mix benefits in 2026 .

Financial Results

Core P&L and Margins (Quarterly)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$14.02 $14.49 $10.11
GAAP Diluted EPS ($USD)$(0.09) $(0.25) $(0.09)
Non-GAAP Net Loss per Share ($USD)$(0.06) $(0.05) $(0.05)
GAAP Gross Margin %9.1% -11.8% -2.0%
Non-GAAP Gross Margin %38.1% 38.5% 38.7%
GAAP Loss from Operations ($USD Millions)$(25.30) $(21.65) $(19.41)
Non-GAAP Loss from Operations ($USD Millions)$(11.82) $(10.56) $(11.53)
Cash and Cash Equivalents ($USD Millions)$75.13 $161.19 $150.55

Year-over-Year Snapshot (Q3 2025 vs Q3 2024)

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$21.68 $10.11
GAAP Gross Margin %21.5% -2.0%
Non-GAAP Gross Margin %40.1% 38.7%
GAAP Diluted EPS ($USD)$(0.10) $(0.09)
Non-GAAP Net Loss per Share ($USD)$(0.06) $(0.05)

Balance Sheet KPIs

KPIQ1 2025Q2 2025Q3 2025
Accounts Receivable ($USD Millions)$12.43 $12.48 $9.79
Inventories ($USD Millions)$16.06 $15.12 $14.67
Earnout Liability ($USD Millions)$2.10 $30.06 $30.90
Stockholders’ Equity ($USD Millions)$341.82 $388.88 $370.99
Weighted Avg Shares (Diluted, Millions)187.78 198.96 212.68

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q4 2025$10.0 ± $0.5 (Q3 2025 guidance) $7.0 ± $0.25 Lowered
Non-GAAP Gross Margin %Q4 202538.5% ± 50 bps (Q3 2025 guidance) 38.5% ± 50 bps Maintained
Non-GAAP OpEx ($USD Millions)Q4 2025~$15.5 (Q3 2025 guidance) ~$15.0 Lowered
Weighted Avg Shares (Millions)Q4 2025n/a~214 New

Note: Q3 2025 actuals landed at the midpoint/higher end of prior guidance (Revenue $10.1M vs $10.0M ± $0.5M; non-GAAP GM 38.7% vs ~38.5%; non-GAAP OpEx $15.44M vs ~$15.5M) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
AI/data center initiativesNVIDIA collaboration across 3 stages; samples Q4; selections/designs in 2026; production in 2027; announced Powerchip 200mm GaN partner . Q1: 12kW platform; GaN bi-directional ICs; reliability milestones .Recognized by NVIDIA in 800V DC ecosystem; introduced 100V GaN FETs; sampling 2.3/3.3kV SiC; material P&L from AI expected 2027; 2026 design foundation .Accelerating ecosystem engagement; revenue impact more 2027.
Supply chain/tariffs/macroChina tariff risk impacting SiC and mobile pricing pressure .CFO reiterates China tariff risk and pricing pressure; pivot reduces China/mobile exposure .Ongoing headwind; managed via mix shift.
Product performance/roadmapQ1: world-first 650V bi-directional GaN IC; 12kW platform; 250M units shipped; reliability benchmarks .New 100V/650V GaN FETs; GaNSafe ICs; HV SiC modules sampling; joint lab showcased 12kW server PS and micro-inverter >97% efficiencies .Expanding portfolio into mid/high voltage.
Regional/customer mixQ2: sharpen mobile focus to premium segments to reduce dependence .Pivot engagement toward US hyperscalers/OEM/ODM; streamline distribution; less China exposure .Shift to US-based high-power customers.
Foundry/manufacturingPowerchip 200mm 180nm GaN partner announced .Continue with TSMC; ramp PSMC; exploring additional foundry partners .Building diversified capacity.
R&D execution/OpExQ1/Q2: significant R&D and OpEx levels with transformation costs .Resource reallocation to high-power; non-GAAP OpEx cut to $15.4M; Q4 guide $15.0M .Refocused investment; disciplined cost control.
Solar micro-invertersQ1: near-term ramp indicated .GaN BDS to ramp in 2026 with lead customer .Timelines clarified; ramp in 2026.

Management Commentary

  • “Navitas 2.0…strategic pivot from consumer and mobile markets to…higher-power segments. Our rapid and decisive actions…are designed to deliver better results… and create long-term value.” — Chris Allexandre, CEO .
  • “We expect Q4 to mark the bottom…reducing channel inventory, consolidating distribution…deprioritizing lower-margin revenue…gradually improve…quality and profitability…throughout 2026.” — Chris Allexandre .
  • “Revenue in the third quarter of 2025 was at the midpoint of guidance at $10.1 million…Gross margin…38.7%…Operating expenses…$15.4 million.” — Todd Glickman, CFO .
  • “For the fourth quarter…revenues at $7 million ± $250,000…Gross margin…38.5% ± 50 bps…trim expenses to $15 million.” — Todd Glickman .

Q&A Highlights

  • Mobile exit and bottoming construct: Management proactively walks away from low-margin mobile; Q4 represents bottom, with sequential revenue growth in 2026 from AI/performance computing/grid .
  • Competitive differentiation in NVIDIA ecosystem: Dual GaN+SiC portfolio plus speed/track record in GaN adoption cited as key differentiators vs peers entering ecosystem .
  • AI data center revenue timing: Shipping today but immaterial; meaningful P&L impact expected in 2027 with 800V DC architecture; 2026 to lay durable design foundation .
  • Margin profile in high-power markets: Expect higher and more sustainable margins vs mobile; customers prioritize innovation/speed over cost-only decisions .
  • Manufacturing and supply chain: Continue with TSMC “for the next multiple years,” ramping PSMC; exploring additional foundry partners; all SiC substrates/EPI outsourced; internal EPI project not initiated given market loosening .

Estimates Context

  • S&P Global consensus estimates (revenue, EPS) for Q1–Q3 2025 were unavailable for NVTS; as a result, we cannot provide a definitive beat/miss vs Wall Street consensus for Q3 2025 or show estimate counts (values not returned)*.
  • Given the Q4 revenue guide reset to $7.0M and maintained gross margin, we expect near-term published estimates to adjust lower on revenue/EPS for Q4 while medium-term models may shift mix and margin higher into 2026–2027 based on high-power engagements .
    *Values retrieved from S&P Global.

Key Takeaways for Investors

  • The pivot is real and rapid: Management is actively pruning low-quality mobile revenue, resetting Q4 as the floor, and reorienting resources toward high-power markets with validated ecosystem partners — expect near-term revenue pressure but improved quality/margins into 2026 .
  • Cash runway intact: $150.6M cash and no debt support execution during the transition; cost actions are visible and sustained, helping bridge to high-power ramps .
  • AI data center thesis is intact but back-end loaded: 2026 should build design momentum; material P&L contribution expected in 2027 with 800V DC architecture — monitor NVIDIA ecosystem progress and broader hyperscaler engagements .
  • Margin mix benefits ahead: Non-GAAP gross margin held ~38.5–38.7% despite revenue declines; high-power programs carry structurally better margin profiles than mobile, supporting expansion as mix shifts .
  • Manufacturing diversification reduces execution risk: Continued TSMC support, PSMC ramp, and search for additional foundry partners mitigate capacity/geography risks and align with high-power product roadmaps .
  • China exposure lower: Deprioritization of low-power China mobile and distribution streamlining reduce tariff/pricing headwinds and should improve predictability over time .
  • Tactical trading: Expect volatility around the guide reset and execution updates; catalysts include additional ecosystem validations, design-win disclosures, and measurable revenue inflection/GM improvements from high-power mix in 2026 .