Navitas Semiconductor Corp Earnings - Q2 2026 Analysis & Highlights
Navitas Semiconductor reported strong sequential growth driven by high-power markets and AI infrastructure momentum, with the company substantially completing its transformation to a high-power focused business while maintaining financial discipline and investing strategically in product development and supply chain resilience.
Key Financial Results
Q2 2026 revenue increased 22% sequentially to $10.5 million, driven by growth across high-power markets.
High-power markets grew more than 50% year-over-year, serving as evidence of building momentum in GaN and high voltage SiC products, especially in AI infrastructure.
Gross margin expanded by 50 basis points sequentially and 100 basis points year-over-year to 39.5%, reflecting improved product mix and higher quarterly revenue.
Operating loss in Q2 was $11.4 million, compared to a loss of $11.7 million in the prior quarter and $10.6 million in Q2 2025.
Loss per share was $0.04 in Q2, flat to the prior quarter and compared to a loss of $0.05 per share in the year-ago second quarter.
Cash and cash equivalents at quarter-end were $557 million, compared to $221 million at the end of Q1, reflecting approximately $373 million in additional capital raised during the quarter at an average stock price of $21.89.
Inventory ended Q2 at $19.5 million, compared to $14.9 million in the prior quarter, reflecting the start of building appropriate buffers of TSMC wafers to ensure smooth customer transitions.
Business Segment Results
High-power represents the majority of overall revenue mix, with revenue contribution from mobile in Q2 declining both sequentially and year-over-year.
Both GaN and SiC contributed to sequential growth, with particular acceleration in the SiC business during the quarter.
Mobile and low-end consumer business continues to be a smaller portion of overall revenue, with expectations for this historical business to become insignificant by year-end.
AI infrastructure is expected to represent more than one-third of total sales by year-end, setting the stage for continued momentum in 2027.
High-power markets grew more than 50% quarter-on-quarter in both Q1 and Q2, with expectations for continued acceleration.
Capital Allocation
The company raised approximately $373 million in additional capital during Q2 at an average stock price of $21.89, meaningfully strengthening the company's balance sheet and overall financial position.
The company continues to have no debt.
Cash will be used for strategic investments including the Foundry+ initiative, potential capacity expansion, and supply reservation agreements with U.S.-based foundry partners, as well as potential pursuit of selective strategic opportunities.
The company is making measured investments to support customers' future anticipated AI data center growth, including building appropriate buffers of TSMC wafers.
Industry Trends and Dynamics
The rapid adoption of AI is driving immense market demand to overcome critical power bottlenecks across AI infrastructure, including both AI data center and grid energy.
Increasing power levels in AC/DC power supply units are driving the need for higher density, which is accelerating the replacement of silicon with high voltage SiC.
The transition to 800-volt architecture for next-generation AI data center is expected to happen in 2027 as various XPUs, GPUs, and hyperscalers will introduce it at different times and it will unfold in a series of steps.
The evolution to 800 volt is inevitable as it remains the industry's only path forward to achieve much higher power in higher density AI racks.
SiC adoption in AC/DC PSUs is being driven by power scaling and density requirements, independent of the 800 volt DC initiatives.
Price increases have been seen in silicon and other technologies like memory, though the company is currently focused on getting customers to adopt new technology and transition to new architecture rather than pursuing price increases in core markets.
Competitive Landscape
Navitas' unique ability to deliver high power products leveraging both GaN and high voltage SiC technologies is benefiting the company from accelerating momentum to enable customers' high power applications.
The company's deliberate strategic decision to prioritize AI infrastructure over automotive, unlike some competitors, has allowed Navitas to bring focused, high-performance products to market faster.
Having both GaN and SiC is seen by customers as a key differentiator, allowing the company to focus on customer needs independent of any technology bias.
Wolfspeed and Renesas have filed patent infringement litigation against Navitas in both GaN and SiC, which management characterizes as a campaign of harassment and intimidation through litigation.
Renesas owns up to 39% of Wolfspeed based on public record.
Macroeconomic Environment
No specific macroeconomic headwinds or concerns were discussed during the earnings call regarding inflation, tariffs, trade, or recession. The company's focus remains on capitalizing on AI infrastructure opportunities.
Growth Opportunities and Strategies
The company is executing its strategic transformation to Navitas 2.0, pivoting the entire organization to focus on the high power market where GaN and high voltage SiC technology can deliver meaningful differentiation.
Resource reallocation and organization realignment is now substantially complete, with new leadership in place and a refreshed product and technology roadmap sharpening focus on AI infrastructure.
Four inflection points have been identified for AI data center growth: (1) SiC adoption in AC/DC PSUs in second half 2026 ramping into first half 2027; (2) introduction of 800 volt busbar in sidecar rack ramping mid-2027; (3) integration of high density DC/DC conversion directly into GPU and XPU trays using GaN ramping mid to late 2027; and (4) solid state transformers in 2028 and beyond.
The company is advancing design activity and sampling across BESS, solar farm converters, PSUs and solid state transformers applications in grid and energy infrastructure.
Recently introduced 2.3 kV and 3.3 kV GeneSiC modules are receiving excellent feedback, with customers beginning to request volume samples for system level testing in the second half of the year.
A new isolated TO-247 family has been introduced, offering unique advantages in liquid cooling applications.
The company announced a strategic partnership with MagnaChip to license GeneSiC Gen 4 and Gen 5 trench-assisted planar technology, which will enable expanded adoption of SiC technology across more target markets and establish another foundry source of Navitas SiC wafers.
A strategic partnership with GlobalFoundries is underway, with lead path from the pivot to 8-inch GaN on track for customer sampling and qualification before year-end, and initial qualified product expected in early 2027.
The company is advancing reference platform solutions including the 800 volt to 6 volt DC/DC power delivery board, with the 800 volt to 12 volt version in development.
The company's 650 volt 11 milliohm GaN FET remains the lowest Rds(on) high voltage GaN device in the industry, with a significant number of customers preparing for mass production.
A new 1.2 kV JFET product line is being released early next year, initially targeting AI data center, solid state transformers and energy grid infrastructure applications, opening the door to address an additional $1 billion of incremental SAM by 2030.
The company is accelerating towards delivering best in class ultra-high voltage SiC technology, with a planned third quarter release of new 6.5 kV SiC technology and development of next-generation 10kV SiC devices with a prominent lead customer.
The company is leveraging AI tools across designs, operations and other functions to accelerate execution and improve efficiency as it scales.
Financial Guidance and Outlook
Q3 2026 revenue is expected to increase 28% sequentially to $13.5 million plus or minus $0.5 million, representing a return to year-over-year growth.
Non-GAAP gross margin for Q3 is expected to be 39.7% plus or minus 100 basis points, representing a 20 basis point increase at the midpoint reflecting continued favorable shift in revenue mix toward high power markets.
Non-GAAP operating expenses for Q3 are anticipated to range between $15.5 million to $17.5 million, representing a prudent increase of approximately $1.0 million to $1.5 million in quarterly OpEx beginning in Q3.
The company expects continued double-digit quarterly growth through the second half of the year, driven entirely by high power markets.
Mid-single-digit revenue growth is expected for the full year while substantially exiting the mobile and low-end consumer market.
The company expects to achieve year-over-year growth by year-end despite mobile being a massive headwind.
Expanding backlog extends beyond 2026 with record book-to-bill supporting expectations for continued double-digit quarterly growth through the second half of the year.
The company is targeting a prudent increase of approximately $1.0 million to $1.5 million in quarterly OpEx beginning in Q3, which equates to roughly a 10% increase yet remains meaningfully lower than expected top-line growth rates.
The incremental OpEx will be allocated to scaling the business, including investments to accelerate new product development, strengthen engineering and application support for key committed programs, and reinforce operational readiness in advance of expected growth in ramping shipments.
Transformation Progress
The transformation to Navitas 2.0 is essentially nearly complete, with the company achieving four quarters of sequential growth and a complete change in revenue mix.
The company is well ahead by over one quarter of expected traction for nearly all sales to be coming from the high power market by year-end, with revenue contribution for mobile and low-end consumer being insignificant.
The company has realized significant efficiency and held operating expense essentially flat over the past nine months during the transformation.
The immediate and overarching focus remains on driving strong top-line growth together with gradual gross margin expansion through improving mix and scale while maintaining an unwavering path toward becoming a profitable high power company.
