Navitas Semiconductor Corporation Q2 FY2025 earnings call

• Navitas transitioned and invested in a leadership position for AI data centers, with NVIDIA selecting them for next-generation 800-volt data centers.
• Raised nearly $100 million in new capital in Q2 to support growth plans.
• Announced new GaN foundry partner Powerchip, enabling a next-generation 8-inch, low-cost manufacturing platform for AI data center opportunities.
• Shifted focus to high-end performance applications in mobile, consumer, and appliance sectors, reducing focus on mainstream, price-sensitive applications.
• Detailed AI data center power conversion stages: solid-state transformers (SSTs) for grid upgrade, 800-volt to 48-volt DC-to-DC converters, and 48-volt to lower voltage converters, with significant market opportunities projected.

Q2 revenues were $14.5 million, in line with guidance. Gross margin in Q2 was 38.5%, up sequentially due to a slight favorable change in product mix. Operating expenses decreased sequentially from $17.2 million to $16.1 million in Q2, with SG&A expenses at $6.9 million and R&D expenses at $9.2 million.

• Third quarter revenue expected at $10 million ± $500,000.
• Gross margin expected to be flat at 38.5% ± 50 basis points.
• Operating expenses anticipated at $15.5 million in Q3, down from $16.1 million in Q2 2025.
• Weighted average share count expected to be approximately 214 million shares in Q3.

• Industry downturn in solar, industrial, EV sectors.
• Continued impact of tariff conflicts.
• Removal of tax credits for solar and EV industry.
• China tariff risks affecting silicon carbide business.

Q: How do you expect revenues to behave between now and the second half of next year during the transition?

A: There will be softer quarters in the near term as they reduce dependency on mobile and layer in new design wins from other sectors, but it sets up well for big growth in '26.

Q: What portion of the mobile business are you deeming as lower gross margin?

A: Mainly the 45-watt and 65-watt mainstream in China, while keeping the 100-watt and plus ultrafast chargers with better margin profile.

Q: Since the announcement from NVIDIA, have you seen any adoption increase in 48-volt data centers?

A: It's too early to call, but GaN designs are underway for 48-volt systems with an eye towards 800-volt, and they'll support it.

Q: Should we expect to see inventory build on the transition from TSMC to Powerchip?

A: TSMC is committed to at least a 2-year supply through mid-2027, with additional last time buys available, providing a supply chain cushion.