Over the last four quarters, the company has not been able to surpass consensus EPS estimates. Navitas Semiconductor, which belongs to the Zacks Electronics - Semiconductors industry, posted revenues of $14.49 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.23%. This compares to year-ago revenues of $20.47 million. The company has not been able to beat consensus revenue estimates over the last four quarters. Navitas Semiconductor Corporation (NVTS) came out with a quarterl ...

Financial Data and Key Metrics Changes - Q2 2025 revenues were $14.5 million, in line with guidance despite industry headwinds [5][26] - Gross margin improved to 38.5% from 38.1% in Q1 2025, attributed to a favorable product mix [27] - Operating loss decreased sequentially to $10.6 million from $11.8 million in Q1 2025 [27][30] Business Line Data and Key Metrics Changes - Revenue decline primarily due to lower sales in the China EV and industrial markets as semiconductor customers await better economic indicators [26] - Operating expenses reduced sequentially from $17.2 million to $16.1 million, with SG&A expenses down by 17% [27] - Inventory decreased to $15.1 million from $16.1 million in Q1 2025, with a $3 million reserve taken for China SiC inventory [28] Market Data and Key Metrics Changes - The semiconductor industry is experiencing a downturn, particularly affecting solar, industrial, and EV sectors [5] - The transition to AI data centers is seen as a significant opportunity, with expectations of a $2.6 billion annual market by 2030 for gallium nitride and silicon carbide [24][14] Company Strategy and Development Direction - The company is shifting focus towards AI data centers and energy infrastructure, reducing emphasis on lower-margin mobile applications [9][31] - A new partnership with PowerChip aims to enhance manufacturing capabilities, transitioning to an 8-inch low-cost platform [7][8] - The company plans to maintain operating expenses at or below current levels while investing in AI data centers [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing industry headwinds but believes strategic investments will position the company for significant growth in AI data centers [24][31] - The transition period may result in softer revenue in the near term, but is expected to set the stage for growth in 2026 and beyond [35][36] - Management expects gross margins to remain flat in the near term, with improvements tied to revenue inflection points [86] Other Important Information - The company raised nearly $100 million in new capital during Q2 2025 to support growth plans [7] - Cash and cash equivalents at the end of Q2 2025 were $161 million, with no debt [30] Q&A Session Summary Question: Revenue expectations during the transition - Management expects softer quarters in the near term as the company reduces dependency on mobile while layering in new design wins [35][36] Question: Margin structure for future business - Management anticipates long-term gross margins north of 50%, driven by high-value markets in AI data centers [39][40] Question: Impact of mobile business transition - The company is focusing on higher-margin ultrafast chargers while reducing exposure to lower-margin products [43][45] Question: Supply chain and inventory during transition - Management confirmed no supply issues, with TSMC committed to a two-year supply, ensuring a smooth transition to PowerChip [55][56] Question: Engagement with data center customers post-NVIDIA announcement - The NVIDIA partnership has opened doors for engagement with other data center customers, enhancing market opportunities [62] Question: Competition and market positioning - The company believes it has a competitive edge due to its range of products and focus on high efficiency and high density technologies [68][70] Question: Design wins and cash flow expectations - Management expects to see design wins ramping up in 2026, with operating cash flow usage projected at $10 million to $11 million going forward [77][78]

Financial Data and Key Metrics Changes - Q2 2025 revenues were $14.5 million, in line with guidance despite industry headwinds [6][26] - Gross margin improved to 38.5% from 38.1% in Q1 2025, attributed to a favorable product mix [27] - Operating expenses decreased sequentially from $17.2 million to $16.1 million, with SG&A expenses down 17% [27][30] - Loss from operations improved to $10.6 million from $11.8 million in Q1 2025 [27] Business Line Data and Key Metrics Changes - The company is shifting focus from mainstream price-sensitive applications to high-end performance applications in mobile consumer and appliance sectors [9] - The transition to PowerChip's eight-inch manufacturing platform is expected to yield higher gross margins and better price points for customers [8][9] Market Data and Key Metrics Changes - The semiconductor industry is experiencing a downturn, particularly in the solar, industrial, and EV sectors, exacerbated by tariff conflicts and the removal of tax credits [6] - The AI data center market is projected to grow significantly, with power consumption expected to increase from 7 gigawatts in 2023 to over 70 gigawatts by 2030 [10][11] Company Strategy and Development Direction - The company is investing in AI data centers, aiming to establish a leadership position in this emerging market [7][24] - A strategic decision was made to reduce focus on lower-margin mobile business while increasing investments in AI data centers and energy infrastructure [31][32] - The company anticipates a significant market opportunity of $2.6 billion per year by 2030 in AI data centers and related energy infrastructure [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term headwinds but expressed confidence in long-term growth potential driven by AI data centers [24][31] - The transition to AI data centers is expected to take multiple quarters, with a focus on maintaining spending discipline [31][32] - Management expects revenue to decline to approximately $10 million in Q3 2025 due to tariff risks and strategic decisions [30][31] Other Important Information - The company raised nearly $100 million in new capital during Q2 2025 to support growth plans [7] - Cash and cash equivalents at the end of Q2 2025 were $161 million, with no debt [30] Q&A Session Summary Question: Revenue expectations during the transition period - Management indicated that revenues may soften in the near term due to reduced dependency on mobile, but new design wins will help offset this in the future [35][36] Question: Margin structure in the AI data center market - Management expects long-term gross margins to exceed 50%, driven by high-value markets focused on performance and efficiency [39][41] Question: Impact of mobile business transition on revenue - The company is refocusing on higher-margin ultra-fast chargers while reducing exposure to lower-margin products, which may lead to a decrease in revenue but is expected to be offset by AI data center growth [44][46] Question: Supply chain and inventory during the transition to PowerChip - Management confirmed no supply issues and that TSMC will provide a two-year supply, ensuring a smooth transition to PowerChip [56][58] Question: Drivers for expected decline in Q3 revenue - The decline is attributed to tariff impacts, reduced mobile dependency, and a slowdown in new design wins [61][63] Question: Engagement with other data center customers post-NVIDIA announcement - The NVIDIA partnership has opened doors for engagement with other data center customers, although the focus will remain on NVIDIA for the foreseeable future [65] Question: Competition in the AI data center market - The company believes it has a competitive edge due to its range of products and focus on high efficiency and reliability [70][72]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the company's unaudited condensed consolidated financial statements for the periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show a significant increase in total assets and liabilities as of June 30, 2025 Condensed Consolidated Balance Sheets | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $161,189 | $86,737 | | Total current assets | $192,865 | $120,266 | | Total assets | $449,441 | $389,978 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $23,429 | $21,144 | | Earnout liability | $30,059 | $10,208 | | Total liabilities | $60,564 | $41,965 | | Total stockholders' equity | $388,877 | $348,013 | | Total liabilities and stockholders' equity | $449,441 | $389,978 | - Total assets increased by **$59.46 million (15.2%)** from $389.98 million at December 31, 2024, to $449.44 million at June 30, 2025, primarily driven by a significant increase in cash and cash equivalents[14](index=14&type=chunk) - Total liabilities increased by **$18.60 million (44.3%)** from $41.97 million at December 31, 2024, to $60.56 million at June 30, 2025, largely due to an increase in earnout liability[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations reveal a decrease in revenues and a significant increase in net loss for H1 2025 Condensed Consolidated Statements of Operations | (In thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | $14,490 | $20,468 | $28,508 | $43,643 | | Cost of Revenues | $12,162 | $12,478 | $20,873 | $26,138 | | Loss from Operations | $(21,653) | $(31,137) | $(46,957) | $(62,712) | | Total other income (expense), net | $(27,149) | $8,870 | $(18,312) | $36,834 | | Net Loss | $(49,075) | $(22,328) | $(65,904) | $(26,009) | | Basic Net Loss Per Share | $(0.25) | $(0.12) | $(0.34) | $(0.14) | | Diluted Net Loss Per Share | $(0.25) | $(0.12) | $(0.34) | $(0.14) | - Net revenues decreased by **29%** for the three months ended June 30, 2025, and by **35%** for the six months ended June 30, 2025, compared to the same periods in 2024[16](index=16&type=chunk) - Net loss significantly increased by **120%** for the three months ended June 30, 2025, and by **153%** for the six months ended June 30, 2025, primarily due to a substantial loss from the change in fair value of earnout liabilities[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity increased due to proceeds from At-the-market offerings, offsetting the impact of net losses Condensed Consolidated Statements of Stockholders' Equity | (In thousands, except shares) | Dec 31, 2024 | Mar 31, 2025 | Jun 30, 2025 | | :--- | :--- | :--- | :--- | | Class A common stock (shares) | 188,114 | 191,763 | 213,084 | | Class A common stock (amount) | $22 | $22 | $24 | | Additional paid-in capital | $732,784 | $743,420 | $839,550 | | Accumulated deficit | $(384,786) | $(401,615) | $(450,690) | | Total stockholders' equity | $348,013 | $341,820 | $388,877 | - Total stockholders' equity increased from $348.01 million at December 31, 2024, to **$388.88 million** at June 30, 2025, primarily driven by **$100.0 million** in proceeds from At-the-market offerings, partially offset by net losses[19](index=19&type=chunk) - The number of Class A common shares issued and outstanding increased from 188.11 million at December 31, 2024, to **213.08 million** at June 30, 2025, largely due to shares issued in connection with At-the-market offerings[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flow](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Cash flow from financing activities increased significantly due to market offerings, while operating cash usage decreased Condensed Consolidated Statements of Cash Flow | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(24,765) | $(34,908) | | Net cash used in investing activities | $(674) | $(8,139) | | Net cash provided by financing activities | $98,540 | $2,203 | | Net increase (decrease) in cash | $73,101 | $(40,844) | | Cash, cash equivalents, and restricted cash at end of period | $161,341 | $111,995 | - Net cash used in operating activities decreased by **$10.14 million**, from $(34.91) million in H1 2024 to $(24.77) million in H1 2025, despite a higher net loss, due to non-cash adjustments like earnout liability changes and stock-based compensation[22](index=22&type=chunk) - Net cash provided by financing activities significantly increased from $2.20 million in H1 2024 to **$98.54 million** in H1 2025, primarily driven by **$100.0 million** in proceeds from At-the-market offerings[22](index=22&type=chunk) [Condensed Notes to Consolidated Financial Statements](index=8&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of significant accounting policies and financial statement components [1. Organization and Basis of Presentation](index=8&type=section&id=1.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) Navitas designs next-gen power semiconductors using a fabless model and recently raised capital via ATM offerings - Navitas Semiconductor Corporation specializes in gallium nitride (GaN) power integrated circuits (ICs) and silicon carbide (SiC) devices for power conversion and charging applications[25](index=25&type=chunk) - The company operates a fabless business model, outsourcing chip manufacturing and packaging to partner suppliers[25](index=25&type=chunk) - As of June 30, 2025, Navitas completed two At-the-Market (ATM) offerings, selling **19.8 million shares** of Class A common stock for gross proceeds of approximately **$100.0 million**[27](index=27&type=chunk) [2. Significant Accounting Policies and Recent Accounting Pronouncements](index=9&type=section&id=2.%20SIGNIFICANT%20ACCOUNTING%20POLICIES%20AND%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) The company is evaluating new accounting standards for expense disaggregation and income tax disclosures - FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, effective for annual periods after December 15, 2026, requiring enhanced disclosure of specific costs and expenses[31](index=31&type=chunk) - FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, effective for fiscal years beginning after December 15, 2024, to enhance transparency regarding income tax information[32](index=32&type=chunk) - The Company adopted ASC 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, during the year ended December 31, 2024, requiring disclosure of segment profit/loss measures and significant segment expenses[33](index=33&type=chunk) [3. Accounts Receivable](index=9&type=section&id=3.%20ACCOUNTS%20RECEIVABLE) Net accounts receivable decreased while the allowance for credit losses increased significantly in H1 2025 Accounts Receivable, Net | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Accounts receivable, gross | $12,443 | $12,578 | | Unbilled receivables | $918 | $1,539 | | Allowance for credit losses | $(885) | $(135) | | Accounts receivable, net | $12,476 | $13,982 | Allowance for Credit Losses Activity | (In thousands) | Allowance for Credit Losses | | :--- | :--- | | Balance at December 31, 2024 | $(135) | | Provision for credit losses | $(750) | | Balance at June 30, 2025 | $(885) | [4. Inventories](index=10&type=section&id=4.%20INVENTORIES) Total inventories remained relatively stable with a slight decrease from year-end 2024 Inventories | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $1,966 | $2,422 | | Work-in-process | $11,142 | $10,465 | | Finished goods | $2,016 | $2,590 | | Total | $15,124 | $15,477 | [5. Property and Equipment, Net](index=10&type=section&id=5.%20PROPERTY%20AND%20EQUIPMENT,%20NET) Net property and equipment decreased due to depreciation expense outpacing new asset additions Property and Equipment, Net | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Furniture and fixtures | $332 | $330 | | Computers and other equipment | $13,317 | $11,714 | | Leasehold improvements | $4,321 | $4,302 | | Construction in Progress | $5,942 | $6,887 | | Accumulated depreciation | $(9,391) | $(7,812) | | Total | $14,521 | $15,421 | - Depreciation expense for the six months ended June 30, 2025, was **$1.7 million**, an increase from $1.4 million in the same period of 2024[39](index=39&type=chunk) [6. Fair Value of Financial Assets and Liabilities](index=11&type=section&id=6.%20FAIR%20VALUE%20OF%20FINANCIAL%20ASSETS%20AND%20LIABILITIES) The fair value of the Level 3 earnout liability increased substantially, resulting in a significant adjustment loss - Cash equivalents classified as Level 1 instruments were **$92.9 million** as of June 30, 2025, and $66.5 million for December 31, 2024[42](index=42&type=chunk) Fair Value of Financial Liabilities | (In thousands) | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Earnout liability (June 30, 2025) | $— | $— | $30,059 | $30,059 | | Earnout liability (Dec 31, 2024) | $— | $— | $10,208 | $10,208 | Level 3 Fair Value Reconciliation | (In thousands) | Fair Value Measurements Using Significant Unobservable Inputs | | :--- | :--- | | Balance at December 31, 2024 | $10,208 | | Fair value adjustment | $19,851 | | Balance at June 30, 2025 | $30,059 | [7. Goodwill and Intangibles](index=12&type=section&id=7.%20GOODWILL%20AND%20INTANGIBLES) Goodwill remained stable while net intangible assets decreased due to amortization expense - Goodwill balance remained at **$163.2 million** as of June 30, 2025, with no impairment losses recorded[47](index=47&type=chunk) Net Intangible Assets | Intangible Asset | Net Book Value (June 30, 2025) | Net Book Value (Dec 31, 2024) | | :--- | :--- | :--- | | Developed Technology | $16,770 | $22,426 | | Patents | $27,836 | $29,066 | | Customer Relationships | $17,314 | $18,529 | | Non-Competition Agreements | $807 | $997 | | Total | $62,727 | $72,195 | - Amortization expense for intangible assets was **$9.47 million** for the six months ended June 30, 2025, consistent with $9.55 million for the same period in 2024[46](index=46&type=chunk) [8. Leases](index=13&type=section&id=8.%20LEASES) The company holds operating and finance leases with total operating lease expense of $1.06 million in H1 2025 Lease Cash Flows and Assets Obtained | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash paid for operating lease liabilities | $1,074 | $1,122 | | Right-of-use assets obtained (operating) | $137 | $530 | | Cash paid for principal portion of finance lease | $51 | $— | | Right-of-use assets obtained (finance) | $985 | $— | Lease Terms and Discount Rates | Lease Type | Weighted-average remaining lease term (years) | Weight-average discount rate | | :--- | :--- | :--- | | Operating Leases | 3.57 | 4.9% | | Finance Lease | 2.83 | 5.0% | Lease Expenses | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating lease expense | $1,062 | $1,178 | | Finance lease amortization | $55 | $— | | Finance lease interest expense | $8 | $— | [9. Stock-Based Compensation](index=14&type=section&id=9.%20STOCK-BASED%20COMPENSATION) Stock-based compensation expense decreased significantly due to an expense reversal from a senior management resignation Total Stock-Based Compensation Expense | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total stock-based compensation expense | $(913) | $13,091 | $6,059 | $26,639 | - A credit of **$(8.3) million** and **$(8.0) million** was recognized for stock-based compensation expense related to 2021 LTIP Options for the three and six months ended June 30, 2025, respectively, including an **$8.4 million reversal** due to a senior management resignation[65](index=65&type=chunk) - Unrecognized compensation cost related to unvested RSU awards totaled **$37.9 million** as of June 30, 2025, expected to be recognized over a weighted-average period of 1.7 years[69](index=69&type=chunk) - Under the 2022 ESPP, employees purchased 400,431 shares for **$0.8 million** in H1 2025, compared to 393,139 shares for $1.8 million in H1 2024[72](index=72&type=chunk) [10. Earnout Liability](index=20&type=section&id=10.%20EARNOUT%20LIABILITY) The earnout liability's fair value increased significantly, resulting in a substantial loss due to a higher stock price - The earnout liability is for up to **10,000,000 Class A common stock shares**, contingent on three independent stock price milestones[77](index=77&type=chunk) Fair Value of Earnout Liability | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Fair value of earnout liability | $30,059 | $10,208 | Change in Fair Value of Earnout Liabilities | (In thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Loss from change in fair value of earnout liabilities | $(27,964) | $(19,851) | [11. Significant Customers and Credit Concentrations](index=21&type=section&id=11.%20SIGNIFICANT%20CUSTOMERS%20AND%20CREDIT%20CONCENTRATIONS) The company has significant revenue concentration with key distributors and faces supply chain risk with its sole GaN supplier Revenue Concentration by Customer | Customer | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Distributor A | 54% | 53% | | Distributor B | * | * | Revenue by Geographic Region | Region | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Hong Kong | 60% | 60% | | Rest of Asia | 16% | 20% | | China | 12% | 9% | | United States | 11% | 10% | | Europe | 1% | 1% | - Navitas relies on a single foundry for GaN IC wafers (TSMC) and a separate single foundry for SiC MOSFET wafers[87](index=87&type=chunk) - **TSMC**, the sole GaN wafer supplier, plans to cease GaN production in July 2027; Navitas is mitigating this by expanding collaboration with **Powerchip** (initial qualification Q4 2025, mass production H1 2026) and evaluating additional suppliers[88](index=88&type=chunk) [12. Net Loss Per Share](index=23&type=section&id=12.%20NET%20LOSS%20PER%20SHARE) Potentially dilutive securities were excluded from the diluted EPS calculation due to the company's net loss position Net Loss Per Share Calculation | (In thousands, except per share amounts) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Basic net loss per share | $(0.25) | $(0.34) | | Diluted net loss per share | $(0.25) | $(0.34) | | Weighted-average common shares - basic | 198,956 | 193,462 | | Weighted-average common shares - diluted | 198,956 | 193,462 | - Potentially dilutive securities (stock options, RSUs, ESPP shares) totaling **1.7 million** and **1.55 million** for the three and six months ended June 30, 2025, respectively, were excluded from diluted EPS due to the net loss[93](index=93&type=chunk) - **10.0 million earnout shares** and **3.3 million LTIP options** were excluded from diluted weighted average share count as their performance and/or market conditions have not been achieved as of June 30, 2025[94](index=94&type=chunk) [13. Provision for Income Taxes](index=24&type=section&id=13.%20PROVISION%20FOR%20INCOME%20TAXES) The effective tax rate remains near zero due to full valuation allowances against deferred tax assets Income Tax Provision | | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Effective tax rate | (0.1)% | (0.2)% | | Income tax provision | $48 | $130 | - The company expects its tax rate to remain close to zero in the near term due to **full valuation allowances** against deferred tax assets[97](index=97&type=chunk) [14. Segment Information](index=24&type=section&id=14.%20SEGMENT%20INFORMATION) Navitas operates as a single operating segment, with the CEO evaluating performance on a consolidated basis - Navitas operates as a **single operating segment** under ASC 280 - Segment Reporting[99](index=99&type=chunk) - The CEO, Gene Sheridan, serves as the Chief Operating Decision Maker (CODM) and primarily evaluates **consolidated net income (loss)** for performance assessment and resource allocation[99](index=99&type=chunk) [15. Commitments and Contingencies](index=24&type=section&id=15.%20COMMITMENTS%20and%20CONTINGENCIES) The company has non-cancellable contractual agreements for leases, equipment, and a university license - Non-cancellable contractual arrangements include lease obligations (Note 8) and an agreement for equipment purchase, with **$1.6 million** due within one year and **$1.4 million** present value in noncurrent liabilities as of June 30, 2025[101](index=101&type=chunk)[102](index=102&type=chunk) - The company provides customer indemnification against patent, copyright, or trademark infringement, but has not had to reimburse any distributors or end customers to date[104](index=104&type=chunk)[105](index=105&type=chunk) - An agreement with a university requires **$1.0 million** in payments by March 2026 and royalty fees on covered products, with expected indemnification for up to $1.0 million of royalty amounts[106](index=106&type=chunk) [16. Related Party Transactions](index=26&type=section&id=16.%20RELATED%20PARTY%20TRANSACTIONS) The company holds an equity method investment in a related entity and has terminated prior lease agreements with executives - Navitas has an equity method investment of **$8.4 million** as of June 30, 2025, in an entity under common control, recognizing a **$0.5 million loss** for the six months ended June 30, 2025[109](index=109&type=chunk) - Related party leases with family members of a senior executive and an entity owned by an executive were terminated by December 2024 and May 2024, respectively, with no rent obligations as of June 30, 2025[110](index=110&type=chunk)[111](index=111&type=chunk) [17. Restructuring](index=26&type=section&id=17.%20RESTRUCTURING) The company implemented cost-reduction plans, including a 19% workforce reduction, incurring $1.5 million in costs - The 2024 Restructuring Plan, announced October 15, 2024, focused on streamlining the organization and incurred **$1.2 million** in Q4 2024[112](index=112&type=chunk) - The 2025 Restructuring Plan, announced January 20, 2025, included a **19% workforce reduction** and incurred **$1.5 million** in costs for the six months ended June 30, 2025[113](index=113&type=chunk) Restructuring Liability Activity | (In thousands) | Amounts accrued as of December 31, 2024 | Costs Incurred | Cash Payments | Adjustment | Amounts accrued as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Employee Severance and Benefits | $511 | $1,469 | $(1,865) | $(93) | $22 | | Other | $6 | $— | $(6) | $— | $— | | Total | $517 | $1,469 | $(1,871) | $(93) | $22 | [18. Subsequent Events](index=27&type=section&id=18.%20SUBSEQUENT%20EVENTS) The company's sole GaN wafer supplier, TSMC, announced it will cease GaN production in July 2027 - On July 1, 2025, **TSMC**, Navitas' sole GaN wafer supplier, announced it would cease GaN production in July 2027[118](index=118&type=chunk) - Navitas is expanding collaboration with **Powerchip Semiconductor Manufacturing Corporation**, targeting initial device qualification in Q4 2025 and mass production in H1 2026, to mitigate supply risk[118](index=118&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Conditions and Operating Results](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Conditions%20and%20Operating%20Results) Management discusses financial condition and operational results, highlighting revenue changes and liquidity [Overview](index=28&type=section&id=Overview) Navitas develops GaN and SiC power devices for various high-growth markets using a fabless business model - Navitas Semiconductor Corporation, founded in 2014, develops gallium nitride (GaN) power integrated circuits and silicon carbide (SiC) devices, utilizing a fabless business model[123](index=123&type=chunk)[124](index=124&type=chunk) - The company's products are used in fast chargers for mobile phones and laptops, consumer electronics, data centers, solar products, and electric vehicles[124](index=124&type=chunk) - Navitas has established relationships with Tier 1 manufacturers and suppliers, shipping GaN products in mass production to major mobile OEMs like Samsung, Dell, and Xiaomi[125](index=125&type=chunk)[126](index=126&type=chunk) - The company spent approximately **79%** and **85%** of its revenue on research and development for the three and six months ended June 30, 2025, respectively[127](index=127&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section compares operational results for the three and six months ended June 30, 2025, and 2024 [Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024](index=32&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030,%202024) Net revenues decreased 29% while operating expenses were significantly reduced due to lower stock-based compensation - Net revenues decreased by **$6.0 million (29%)** to $14.5 million, primarily due to a decline in industrial China markets[140](index=140&type=chunk) - Cost of revenues decreased by **$0.3 million (3%)** to $12.2 million, driven by lower sales offset by a **$3.2 million inventory reserve** due to demand softness in China[141](index=141&type=chunk) - Research and development expense decreased by **$7.5 million (39%)** to $11.5 million, mainly due to a **$6.8 million decrease in stock-based compensation** (including a $4.2 million reversal) and $2.7 million in headcount reductions, partially offset by a $2.2 million NRE impairment[142](index=142&type=chunk) - Selling, general and administrative expense decreased by **$7.6 million (50%)** to $7.8 million, primarily from a **$7.0 million decrease in stock-based compensation** (including a $4.2 million reversal) and $1.1 million in headcount reductions[143](index=143&type=chunk)[144](index=144&type=chunk) - A **$28.0 million loss** from the change in fair value of earnout liabilities was recognized, a $35.5 million change from a gain in the prior year, driven by an increase in the Class A common stock closing price[147](index=147&type=chunk) [Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024](index=33&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030,%202024) Net revenues declined 35% and operating expenses fell 38%, driven by lower stock-based compensation and headcount - Net revenues decreased by **$15.1 million (35%)** to $28.5 million, due to declines in mobile and industrial markets[150](index=150&type=chunk) - Cost of revenues decreased by **$5.3 million (20%)** to $20.9 million, driven by lower sales and product mix[151](index=151&type=chunk) - Research and development expense decreased by **$15.0 million (38%)** to $24.2 million, primarily due to a **$10.3 million decrease in stock-based compensation** (including reversals), $4.5 million in headcount reductions, and $2.7 million in R&D product development cost decreases, partially offset by a $2.2 million NRE impairment[152](index=152&type=chunk) - Selling, general and administrative expense decreased by **$12.0 million (38%)** to $19.5 million, mainly from a **$10.1 million decrease in stock-based compensation** (including reversals) and $2.1 million in headcount reductions[153](index=153&type=chunk) - Restructuring expense of **$1.5 million** was incurred for cost-reduction plans involving headcount reductions[155](index=155&type=chunk) - A **$19.9 million loss** from the change in fair value of earnout liabilities was recognized, a $53.6 million change from a gain in the prior year, due to an increase in the Class A common stock closing price[157](index=157&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents increased significantly due to proceeds from At-the-market offerings - As of June 30, 2025, cash and cash equivalents totaled **$161.2 million**, an 86% increase from December 31, 2024[162](index=162&type=chunk)[164](index=164&type=chunk) - The company expects to fund cash requirements through existing cash on hand and believes current levels are sufficient for the foreseeable future[162](index=162&type=chunk) - Proceeds from At-the-market (ATM) offerings contributed approximately **$100.0 million** in gross proceeds, significantly bolstering liquidity[161](index=161&type=chunk) - The company anticipates continued net operating losses and negative cash flows from operations, with increasing R&D, G&A, and capital expenditures to expand operations and product offerings[161](index=161&type=chunk) [Cash Flows](index=35&type=section&id=Cash%20Flows) Financing activities provided significant cash inflow, while operating cash usage improved from the prior year Cash Flow Summary | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(24,765) | $(34,908) | | Net cash used in investing activities | $(674) | $(8,139) | | Net cash provided by financing activities | $98,540 | $2,203 | - Net cash used in operating activities decreased by **$10.14 million**, from $(34.91) million in H1 2024 to $(24.77) million in H1 2025, primarily due to non-cash adjustments like earnout liability changes and stock-based compensation[165](index=165&type=chunk)[166](index=166&type=chunk) - Net cash provided by financing activities significantly increased to **$98.54 million** in H1 2025, mainly from **$100.0 million** in proceeds from ATM offerings[169](index=169&type=chunk) [Contractual Obligations, Commitments and Contingencies](index=36&type=section&id=Contractual%20Obligations,%20Commitments%20and%20Contingencies) The company's primary contractual obligations relate to leases and an equipment purchase agreement - The company's non-cancellable contractual arrangements include lease obligations and an agreement for equipment purchase, as detailed in Note 8 and Note 15[171](index=171&type=chunk) [Off-Balance Sheet Commitments and Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Commitments%20and%20Arrangements) The company did not have any off-balance sheet arrangements as of the reporting date - As of June 30, 2025, Navitas did not have any off-balance sheet arrangements[172](index=172&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There have been no material changes to critical accounting policies from the 2024 annual report - There have been no material changes to the company's critical accounting policies and estimates from those disclosed in its 2024 annual report on Form 10-K[175](index=175&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses exposure to market risks, including economic conditions and commodity price fluctuations - Adverse changes in the global economic landscape have impacted demand for Navitas' products, leading to changes in customer order behaviors and vendor inventory levels[176](index=176&type=chunk) - The company faces commodity risk from market price fluctuations of raw materials, notably gold, which can result in increased costs passed on by suppliers[177](index=177&type=chunk) [Item 4. Control and Procedures](index=37&type=section&id=Item%204.%20Control%20and%20Procedures) Management concludes disclosure controls were ineffective due to material weaknesses in internal control - As of June 30, 2025, Navitas' disclosure controls and procedures were **not effective** due to material weaknesses in internal control over financial reporting[178](index=178&type=chunk) - Material weaknesses include insufficient processes for identifying and analyzing risks, lack of competent personnel for complex transactions, and inadequate control activity performance and evaluation[179](index=179&type=chunk) - These weaknesses led to issues in accurately identifying and presenting activities within statements of operations and cash flows, and in the external reporting process for R&D assets, property and equipment, and equity transactions[181](index=181&type=chunk) - Management is actively implementing a remediation plan, including engaging external advisors, assessing training needs, and strengthening controls for financial close and reporting processes, with expected completion by the end of fiscal 2025[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - Navitas is not currently a party to any material legal proceedings[187](index=187&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) Introduces new risks related to product announcements and significant supply chain vulnerabilities [Risks Related to Product or Technology Announcements](index=39&type=section&id=Risks%20Related%20to%20Product%20or%20Technology%20Announcements) Product announcements may not translate into future revenue, especially in new and emerging markets - Announcements regarding product selections by key customers (e.g., Nvidia collaboration) may affect stock price but do not guarantee binding commitments or future revenues[189](index=189&type=chunk)[191](index=191&type=chunk) - The ability to accurately predict future revenues and profits is uncertain, especially in new or emerging markets for products like those intended for AI data centers, where end-customer acceptance and system architecture adoption are unproven[193](index=193&type=chunk)[194](index=194&type=chunk) [Risks Related to Our Supply Chain and Manufacturing](index=40&type=section&id=Risks%20Related%20to%20Our%20Supply%20Chain%20and%20Manufacturing) The announced cessation of GaN wafer production by the company's sole supplier poses a significant risk - Navitas relies on **TSMC** as its sole supplier for GaN wafers, and TSMC's announced cessation of GaN production by July 2027 poses a significant risk[195](index=195&type=chunk) - Delays or disruptions in qualifying alternative suppliers like **Powerchip** could negatively impact customer orders, increase costs, and lead to revenue loss or market share decline[196](index=196&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Form 10-Q, including agreements and officer certifications - Exhibits include an agreement with Ranbir Singh and SiCPower, LLC, a letter of resignation and separation agreement for Daniel M. Kinzer, and certifications from the Chief Executive Officer and Chief Financial Officer[198](index=198&type=chunk) [Signatures](index=42&type=section&id=Signatures) The report is duly signed by the CEO and CFO on behalf of the company - The report was signed by Gene Sheridan, President and CEO, and Todd Glickman, Sr. V.P., CFO and Treasurer, on August 4, 2025[200](index=200&type=chunk)

Company Overview - Navitas Semiconductor is positioned as a pure-play next-generation power semiconductor company, focusing on GaN and SiC technologies[8] - The company has shipped over 300 million GaN power ICs without silicon power MOSFETs[9] - Navitas has a strong IP portfolio with over 300 patents issued or pending related to GaN and SiC[9, 45] - Navitas' annual revenue has grown significantly, reaching $84 million in 2024[9] Technology and Market Disruption - GaN and SiC technologies are replacing silicon in next-generation power applications, offering up to 20x faster switching and up to 3x higher power density[12] - GaN-based systems can achieve up to 40% energy savings and up to 25% lower system cost compared to Si-based systems[12] - Navitas has enabled the GaN mobile charger market, achieving up to 3x faster charging in half the size and weight[14] AI Data Center Opportunity - AI is driving a dramatic increase in power demands, requiring a 100x increase in server rack power[18, 20] - The transition to 800V data centers is expected to increase the power semiconductor TAM to $2.6 billion per year by 2030, presenting a significant opportunity for GaN and SiC[32] - The adoption of 800V data centers is projected to grow from 0% in 2025 to 80% of total AI data centers by 2030[38] - The power semi TAM for 800V data centers is estimated to reach $2.564 billion in 2030[38] - GaN and SiC technologies can capture a significant percentage of the total $3 billion per year AI data center opportunity (48V + 800V)[42]

Financial Performance - Total revenue for Q2 2025 was $14.5 million, a decrease of 29.3% from $20.5 million in Q2 2024, but an increase from $14.0 million in Q1 2025[6] - GAAP loss from operations for Q2 2025 was $21.7 million, improved from a loss of $31.1 million in Q2 2024 and a loss of $25.3 million in Q1 2025[6] - Non-GAAP loss from operations for Q2 2025 was $10.6 million, compared to a loss of $13.3 million in Q2 2024[6] - Net revenues for Q2 2025 were $14,490 million, a decrease of 29.2% from $20,468 million in Q2 2024[21] - The net loss for Q2 2025 was $49,075 million, significantly higher than the net loss of $22,328 million in Q2 2024[21] - Non-GAAP gross profit for Q2 2025 was $5,573 million, with a non-GAAP gross margin of 38.5%, compared to 40.3% in Q2 2024[22] - Total operating expenses for Q2 2025 were $23,981 million, compared to $39,127 million in Q2 2024, reflecting a reduction of 38.6%[21] Cash and Assets - Cash and cash equivalents increased to $161.2 million as of June 30, 2025[6] - Cash and cash equivalents increased to $161,189 million as of June 30, 2025, up from $86,737 million at the end of 2024[25] - Total current assets rose to $192,865 million in Q2 2025, compared to $120,266 million at the end of 2024[25] - Total liabilities increased to $60,564 million as of June 30, 2025, compared to $41,965 million at the end of 2024[25] Market and Growth Potential - The company raised $100 million through the sale of approximately 20 million common shares to support growth in AI data centers and energy infrastructure[2] - Navitas estimates a $2.6 billion market potential for GaN and SiC technologies in AI data centers by 2030, with a 100x increase in server rack power capacity[2] - Partnership with NVIDIA aims to develop next-generation 800V data centers, with a projected $0.5 billion annual SiC market potential by 2030[6] - New manufacturing partnership with Powerchip for 200mm (8") 180nm GaN is expected to lower costs and increase capacity[6] - The company plans to focus on high-end mobile GaN charger markets, including a collaboration with Xiaomi for a 90W charger[11] Future Projections - Third quarter 2025 net revenues are expected to be $10.0 million, with a non-GAAP gross margin of approximately 38.5%[7] - The average shares outstanding for the calculation of non-GAAP net loss per share were 198,956 million for Q2 2025[23] - Non-GAAP net loss per share for Q2 2025 was $0.05, compared to $0.07 in Q2 2024[23]

Core Viewpoint - Navitas Semiconductor reported its Q2 2025 financial results, highlighting a strategic focus on AI data centers and energy infrastructure, supported by a $100 million capital raise and new manufacturing partnerships [2][6][7]. Financial Highlights - Total revenue for Q2 2025 was $14.5 million, a decrease from $20.5 million in Q2 2024 and a slight increase from $14.0 million in Q1 2025 [7]. - GAAP loss from operations was $21.7 million, improved from a loss of $31.1 million in Q2 2024 and a loss of $25.3 million in Q1 2025 [7]. - Cash and cash equivalents increased to $161.2 million as of June 30, 2025 [7]. Market, Customer, and Technology Highlights - Navitas is focusing on AI data centers and energy infrastructure, leveraging partnerships with NVIDIA and others [2][6]. - The company estimates that GaN and SiC technologies can support a 100x increase in server rack power capacity for AI data centers, with a projected market potential of $2.6 billion by 2030 [2]. - Navitas has developed a new market for GaN mobile chargers and aims to expand into AI data centers and energy infrastructure [2]. Near Term Business Outlook - Q3 2025 net revenues are expected to be around $10.0 million, with a non-GAAP gross margin projected at 38.5% [8]. - Non-GAAP operating expenses for Q3 2025 are anticipated to be approximately $15.5 million [8]. - The company plans to reduce revenue dependence on mobile, consumer, and appliance sectors while increasing focus on AI data centers and energy infrastructure [6]. Strategic Developments - Navitas announced a partnership with Powerchip for manufacturing 200mm (8") GaN, aimed at reducing costs and increasing capacity [6]. - The company continues to lead in the high-end mobile GaN charger market, collaborating with Xiaomi to deliver a compact 90W charger [6].

Core Viewpoint - Navitas Semiconductor's stock experienced significant volatility due to developments in the U.S.-China trade relations, with a notable decline followed by recovery after securing a new contract with a major Chinese customer [1][2][4]. Group 1: Stock Performance - Navitas Semiconductor's share price fell by 9.2% during a week marked by trade news, while the S&P 500 and Nasdaq Composite also saw declines of 2.4% and 2.2%, respectively [1]. - The stock experienced a recovery later in the week after the announcement of a new battery contract with a major Chinese customer [2][5]. Group 2: Trade Relations Impact - The Trump administration paused restrictions on semiconductor sales to China, which could potentially facilitate a trade deal but may also introduce long-term competitive pressures for Navitas from Chinese suppliers [4]. - The trade situation is complex, as while the stock initially suffered from trade news, it rebounded after announcing a partnership with Xiaomi for a new device charger [5]. Group 3: Market Opportunities and Risks - The Chinese market presents significant growth opportunities for Navitas, particularly in the gallium nitride (GaN) and silicon carbide (SiC) sectors [6]. - However, there is a risk that increased competition from local suppliers could lead to commodification trends, negatively impacting Navitas's long-term outlook [6].

Core Insights - Navitas Semiconductor (NVTS) is expected to report second-quarter 2025 net revenues between $18 million and $20 million, with a Zacks Consensus Estimate of $14.5 million, indicating a year-over-year decline of 29.1% [1][2] - The consensus estimate for loss is 5 cents per share, unchanged over the past 30 days, compared to a loss of 7 cents per share in the same quarter last year [2] Company Performance - NVTS shares have increased by 97.8% year-to-date, outperforming the broader Zacks Computer and Technology sector's return of 11.4% and the Zacks Electronics Semiconductors industry's return of 16.7% [6] - The stock is currently trading at a forward Price/Sales ratio of 16.92X, significantly higher than the sector's average of 6.71X, indicating a stretched valuation [10] Market Dynamics - The company is facing challenges due to sluggishness in solar, electric vehicle (EV), and industrial markets, which are expected to negatively impact second-quarter results [5][9] - Uncertainty over tariffs and trade issues between the United States and China is also a headwind for Navitas [5] Growth Prospects - Navitas is expanding its GaN technology offerings, targeting AI data centers and EV power systems, with significant investments from NVIDIA and Tesla [4][9] - The company is launching new 80-120V GaN devices in 2025 aimed at the 48V DC-DC converter market, which could disrupt traditional power electronics architectures [17] - In the EV sector, NVTS has secured over 40 design wins globally and has a rapidly expanding $900 million EV pipeline [18] Competitive Landscape - Navitas faces significant competition from companies like Wolfspeed and Power Integrations, which are investing heavily in wide bandgap technologies [20] - Power Integrations offers a GaN portfolio with unique high-voltage devices, while Wolfspeed is expanding its manufacturing capacity with advanced technology [21] Conclusion - The muted revenue growth outlook and stretched valuation suggest that NVTS may be a risky investment at this time, with a Zacks Rank of 4 (Sell) indicating that investors should be cautious ahead of the second-quarter results [22]

GaNSense™ Control ICs drive Xiaomi's 90W next-gen GaN charger, setting new standards for performance, size, and weight in ultra-portable fast charging. TORRANCE, Calif., July 31, 2025 (GLOBE NEWSWIRE) -- Navitas Semiconductor (Nasdaq: NVTS), the industry leader in next-generation GaNFast™ gallium nitride (GaN) and GeneSiC™ silicon carbide (SiC) power semiconductors, today announced that Xiaomi's next-generation 90W GaN charger will be powered by Navitas' GaNSense Control ICs. As the world's smallest 90 W ch ...