Navitas Semiconductor Corporation ((NVTS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Navitas Semiconductor Corporation’s recent earnings call revealed a mixed sentiment, reflecting both strategic advancements and current financial hurdles. The company is navigating industry downturns and tariff issues while strategically shifting away from lower-margin markets. Despite these challenges, Navitas is positioning itself for future growth through key partnerships and initiatives.
NVIDIA Partnership for AI Data Centers
Navitas announced a significant partnership with NVIDIA to support next-generation 800-volt data centers. This collaboration positions Navitas to capitalize on the burgeoning AI data center market, which is expected to be a substantial growth area in the future.
Capital Raise
In Q2, Navitas successfully raised nearly $100 million in new capital. This influx of funds will bolster the company’s cash flow, enabling further investment in AI data centers and related energy infrastructure, which are pivotal to Navitas’s growth strategy.
New GaN Foundry Partner
Navitas has partnered with Powerchip to transition to 8-inch wafer manufacturing. This move is set to increase chip production capacity by nearly 80%, significantly enhancing Navitas’s manufacturing capabilities and supporting its growth ambitions.
Focus on High-End Applications
The company is shifting its focus to high-end performance applications in the mobile, consumer, and appliance sectors. This strategic move is aimed at maintaining spending discipline and driving future growth by targeting more profitable market segments.
Positive Customer Evaluations
Navitas received encouraging feedback from initial customer evaluations of their technology. These positive evaluations suggest strong potential for future design wins and broader market acceptance, bolstering the company’s growth prospects.
Revenue Decline and Industry Downturn
Navitas reported Q2 revenues of $14.5 million, aligning with guidance but reflecting the ongoing semiconductor industry downturn. The slowdown in solar, industrial, and EV sectors continues to impact revenue.
China Market Challenges
The company faces declining revenue from China’s EV and industrial markets, primarily due to semiconductor customers awaiting better economic conditions and ongoing tariff conflicts affecting sales.
Inventory Reserve and Tariff Impact
Navitas took a $3 million inventory reserve on U.S.-produced SiC products, citing unstable tariff environments that are affecting sales in China.
Projected Revenue Reduction
For Q3, Navitas anticipates a revenue reduction to $10 million, influenced by China tariff risks and strategic decisions to de-prioritize lower-margin business.
Continued Operating Losses
The company reported a second-quarter operating loss of $10.6 million, showing sequential improvement but still highlighting ongoing financial challenges.
Forward-Looking Guidance
Navitas’s guidance for Q3 2025 includes maintaining operating expenses around $15.5 million and projecting a gross margin similar to Q2’s 38.5%. Despite near-term revenue challenges, the company is optimistic about long-term growth, driven by AI data center and energy infrastructure opportunities, with a potential market of $2.6 billion per year by 2030.
In summary, Navitas Semiconductor’s earnings call reflects a strategic pivot towards high-growth areas like AI data centers, supported by key partnerships and capital raises. While current financial performance is impacted by industry downturns and tariff issues, the company is positioning itself for future success through strategic initiatives and market focus.