Navitas Semiconductor (NVTS) - 2025 Q4 - Annual Report

Financial Performance - Net revenues for the twelve months ended December 31, 2025 were $45.9 million, a decrease of $37.4 million, or 45%, compared to $83.3 million for the same period in 2024[215]. - Cost of revenues for the twelve months ended December 31, 2025 was $31.7 million, a decrease of $23.3 million, or 42%, compared to $54.0 million for the same period in 2024[216]. - Research and development expense for the twelve months ended December 31, 2025 was $49.8 million, a decrease of $26.2 million, or 34%, compared to $76.0 million for the same period in 2024[217]. - Selling, general and administrative expense for the twelve months ended December 31, 2025 was $35.2 million, a decrease of $27.7 million, or 44%, compared to $62.9 million for the same period in 2024[218]. - The company reported a net loss of $116.9 million for the twelve months ended December 31, 2025, compared to a net loss of $84.6 million for the same period in 2024, representing an increase in loss of $32.4 million, or 38%[214]. Restructuring and Impairment - The Navitas 2.0 Restructuring Plan incurred total restructuring expenses and impairment charges of $16.6 million in the fourth quarter of 2025[201]. - Restructuring and impairment expenses for the year ended December 31, 2025, totaled $18.0 million, with $16.6 million related to the Navitas 2.0 Restructuring Plan[220]. Cash Flow and Financing - Net cash used in operating activities for the year ended December 31, 2025, was $42.9 million, reflecting a net loss of $117.0 million[229]. - Cash and cash equivalents increased by $150.1 million or 173% to $236.9 million as of December 31, 2025, primarily due to PIPE and ATM offerings[228]. - Net cash provided by financing activities for the year ended December 31, 2025, was $194.6 million, mainly from proceeds of $200.0 million related to PIPE and ATM offerings[233]. - For the year ended December 31, 2025, net cash used in investing activities was $1.4 million, primarily due to purchases of fixed assets[232]. Investment and Equity - The company recorded a net gain of $3.9 million from its equity method investment for the year ended December 31, 2024, but reported a net loss of $1.1 million for the year ended December 31, 2025[203]. - The equity method investment resulted in a net loss of $1.1 million for the year ended December 31, 2025, compared to a net gain of $3.9 million in 2024[225]. Market Focus and Strategy - The company shifted focus towards high-power markets, including AI data centers and energy infrastructure, to improve business predictability and expand gross margins[202]. - Revenue from China accounted for 47% of total revenue for the year ended December 31, 2025, down from 60% in 2024[207]. Other Financial Metrics - The income tax provision for the year ended December 31, 2025, was $0.1 million, compared to a benefit of $0.3 million for the previous year[224]. - The company incurred $1.7 million in dividend income decrease due to lower investment balances as of December 31, 2025[222]. - The company expects to continue incurring net operating losses and negative cash flows from operations, with research and development expenses remaining relatively flat[226]. Earnout Liability - The company recognized a $12.4 million loss from an increase in fair value of earnout liabilities, with the estimated fair value of earnout shares rising from $1.18 to $2.33[223]. - The earnout liability was initially measured at fair value at the closing of the Business Combination and subsequently remeasured at the end of each reporting period[253]. - The estimated fair value of the earnout liability was determined using a Monte Carlo analysis of 20,000 simulations of the future path of the Company's stock price[254]. - The assumptions utilized in the calculation of the earnout liability include the Company's stock price volatility, risk-free interest rate, and the expected term of the award[254]. - The change in fair value of the earnout liability is recorded as part of "Other income (expense), net" in the consolidated statement of operations[253]. Regulatory Exemption - The company is exempt from the disclosure requirements of market risk as a "smaller reporting company" under Regulation S-K[256].