Navitas Semiconductor Corporation Q1 2024 Financial Results

Ticker: NVTS

Exchange: NASDAQ

Sector: Technology

Industry: Semiconductors

Report Date: May 16, 2024

Operating Results

Navitas Semiconductor Corporation reported first-quarter revenues of $23.2M, marking an impressive 73% increase year-on-year. This growth underscores our market leadership with our GaN technologies increasingly replacing silicon in various applications. We have also diversified our business into new markets, such as home appliances and AI-driven data centers, while continuing strong shipments into industrial, electric vehicle (EV), solar, and energy storage segments.

Market Performance

Data Centers: Demand for our products has surged due to the burgeoning AI applications requiring higher energy efficiency. Notably, we have stepped up to the challenge by enabling server power supplies to significantly increase their energy efficiency and power output. We are pleased to announce design wins at major power supply companies and anticipate rapid revenue growth in this sector, driven by continued advancements.

EV Market: Our customer pipeline in the EV market shows significant expansion, with strong penetration into mainstream passenger battery EVs as well as plug-in hybrids, commercial EVs, and clean-energy vehicles. Our innovations enable faster and more efficient charging solutions, with our platforms expected to generate considerable revenues starting in 2025.

Home Appliances and Industrial: We have made remarkable progress with multiple customer projects in development, resulting in design wins at leading manufacturers in various segments. This segment’s pipeline continues to grow, and we foresee substantial revenue contributions from these innovations.

Solar and Energy Storage: We are experiencing a gradual recovery in this segment with new wins across multiple regions. Our pipeline here has seen significant growth, and we anticipate strong revenue contributions as these projects mature in 2025.

Mobile and Consumer Markets: Continued adoption of our GaN technologies in chargers for smartphones, tablets, and notebooks has driven robust growth. The launch of new products using our advanced technology underlines our leadership in this space.

Financial Performance

For Q1 2024, Navitas reported a gross profit of $9.52M, representing a gross margin of 41.06%. Operating expenses amounted to $41.09M, leading to an operating loss of $31.58M. Total other income and expenses netted $27.96M, reducing the pretax loss to $3.61M. After accounting for a tax expense of $70,000, the net loss stood at $3.68M, resulting in an EPS of -$0.02.

Balance Sheet and Cash Flow

Navitas ended the quarter with a strong balance sheet, featuring cash and cash equivalents of $129.68M and no debt. Accounts receivable decreased to $22.2M, while inventory levels rose to $33.2M due to strategic purchases. The increase in inventory is aligned with expectations of ramping up major products later in the year.

Cash flow from operations was a net outflow of $19.78M, influenced by investments in property, plant, and equipment totaling $2.9M. Free cash flow for the quarter was -$22.68M. We anticipate reaching operating margin level breakeven once revenue reaches $50M to $55M per quarter.

Future Outlook

For Q2 2024, Navitas guides revenue expectations to $20M plus or minus $500,000, with a projected gross margin of approximately 40%. Although we may see moderated growth in 2024, the continued strength and adoption of our innovative technologies bolster our confidence for significant growth in the coming years.

Conference Call Highlights

During the investor call, CEO Gene Sheridan emphasized the strength of Navitas’s innovative product portfolio and expanding customer pipeline. The Q&A session revealed insights into competitive dynamics, market strategies, and operational efficiencies. The call concluded with reiterations of Navitas's long-term growth prospects and commitment to delivering value to its shareholders.

For more detailed information, please refer to the full financial report and SEC filing.

© 2024 Navitas Semiconductor Corporation. For further inquiries, please email ir@navitassemi.com.