Navitas Semiconductor (NVTS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $20.5 million, up 13% year-over-year and at the top end of guidance, with nearly 40% first-half growth despite broader semiconductor market slowdowns.

• Strong momentum in GaN and SiC technologies, with over 100 customer projects each for GaNSafe ICs and Gen-3 Fast SiC, and major design wins in AI data centers, EV, appliances, industrial, solar, and mobile.

• Net loss for Q2 2024 was $22.3 million, a significant improvement from $58.5 million in Q2 2023, mainly due to a $7.6 million gain from the change in fair value of earnout liabilities.

• No significant project push-outs or delays reported; customer pipeline continues to expand across all segments.

• The company maintains a fabless model, focusing on GaN and SiC power semiconductors for mobile, consumer, data center, solar, and EV applications.

Financial highlights

• Q2 2024 revenue was $20.5 million, up from $18.1 million in Q2 2023.

• Non-GAAP gross margin was 40.3%, down from 41.5% a year ago, while GAAP gross margin was 19.7%.

• Operating expenses for Q2 2024 were $39.1 million, up 13% year-over-year; non-GAAP operating expenses were $21.5 million.

• Q2 2024 net loss attributable to controlling interests was $22.3 million; non-GAAP net loss was $12.0 million.

• Cash and cash equivalents stood at $112 million as of June 30, 2024, with no debt; inventory reduced to $25.2 million from $33.2 million sequentially.

Outlook and guidance

• Q3 2024 revenue expected at $22 million (+/- $0.5M), representing over 7% sequential growth.

• Q3 non-GAAP gross margin expected around 40% (+/- 50 bps), with margin improvements anticipated as higher-margin markets recover.

• Non-GAAP operating expenses for Q3 expected to remain flat at $21.5 million.

• Long-term gross margin target remains 50%+ as market mix shifts to higher-margin segments.

• Tax rate expected to remain close to zero in the near term due to full valuation allowances against deferred tax assets.