Navitas Semiconductor Corp Q4 FY2024 earnings call

• Gene Sheridan noted that 2024 ended with an all-time high revenue of $83 million despite the semiconductor slowdown, with the GaN business growing over 50% and $450 million in design wins. The customer pipeline grew from $1.25 billion at the end of 2023 to $2.4 billion at the end of 2024. • The data center sector had 40 customer project wins, with system reference designs enabling growth, and the data center pipeline more than doubling. • In the EV space, there were over 40 design wins in 2024, including Changan selecting Navitas GaNSafe technology for EV onboard chargers. • The mobile sector had over 180 design wins, facilitating broad adoption of GaN chargers. • Todd Glickman discussed fourth quarter and annual 2024 financial results, with Q4 revenue at $18 million, full-year revenue at $83.3 million, gross margin details, and expense management, including reduced operating expenses in Q4.

In 2024, Navitas Semiconductor achieved an all-time high revenue of $83 million despite the semiconductor slowdown. The GaN business grew over 50% during the year, reaching an all-time high with revenues from mobile, consumer, appliance, and the initial ramp-up of data centers. The silicon carbide business was impacted by the slowdown in solar, industrial, and EV sectors. GaN revenue contributed significantly to the overall growth, with the GaN business growing over 50% for the full year. The EV pipeline expanded rapidly to over $900 million compared to $400 million a year prior, representing nearly 40% of the $2.4 billion pipeline. The data center sector had 40 customer project wins throughout 2024, and the mobile sector had over 180 design wins.

• Expect Q1 2025 revenues to be in the range of $13 million to $15 million, reflecting seasonality and inventory corrections. • Anticipate recovery starting in Q2 2025 and healthy growth in the second half, fueled by 2024 design wins and the expected semiconductor recovery. • First quarter gross margin is expected to be slightly lower than the fourth quarter, with modest margin improvement throughout the year. • Operating expenses are expected to be reduced to $18 million in Q1 2025 and approximately $15.5 million per quarter thereafter, with the goal of achieving positive EBITDA in 2026.

• The semiconductor industry slowdown impacted the silicon carbide business. • Uncertainty in market demand for products. • Geopolitical factors such as tariffs and changing macroeconomic conditions that could affect the business.

Q: Good afternoon. Thank you for standing by, and welcome to Navitas Semiconductor’s Fourth Quarter 2024 Financial Results Conference Call.

A: Operator welcomes everyone to the call.

Q: Ross Seymore from Deutsche Bank inquired about where the cyclical bottom is and the strength of the GaN business and silicon carbide market.

A: Gene Sheridan stated that Q1 appears to be the cyclical bottom, with recovery starting in Q2. The GaN business grew over 50% last year, and the silicon carbide market was weak due to end-market weakness, but the strategy is shifting with a focus on strategic applications.

Q: Quinn Bolton from Needham & Company asked about operating expenses beyond Q1 and data center expectations.

A: Todd Glickman said operating expenses are expected to be $15.5 million per quarter thereafter, and the data center trajectory is positive with strong design wins.

Q: Kevin Cassidy from Rosenblatt Securities asked about data center power supplies and deployments.

A: Gene Sheridan said the sweet spot in data center power supplies is at higher power levels, and deployments are not tied to specific GPUs but related to next-generation processors.

Q: Jack Egan from Charter Equity Research asked about distributor disengagement and capital raising.

A: Gene Sheridan said distributor disengagement was separate, and Todd Glickman stated the cash balance is $87 million with no debt and that cash would be raised for strategic initiatives if needed.

Q: Jon Tanwanteng from CJS Securities asked about the scheduling of the $450 million design win pipeline.

A: Gene Sheridan explained that design wins are lifetime revenues spread over years, with only programs ramping in 2025, 2026, or 2027 considered.

Q: Ross Seymore asked about the competitive landscape.

A: Gene Sheridan said inventory pockets and ASP erosion are stabilizing, and GaN is not as dramatically affected.

Q: Richard Shannon from Craig-Hallum asked about the 2025 sales outlook and geopolitical environment.

A: Gene Sheridan said both GaN and silicon carbide have healthy growth with a combination in key markets, and the company is well-positioned in the changing macroeconomic environment.