Navitas Semiconductor (NVTS) Q2 2024 earnings summary

Executive summary

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

• Major design wins and strong momentum in GaN and SiC technologies, with over 100 customer projects each in the pipeline across AI data centers, EVs, appliances, solar, and mobile segments.

• 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.

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

• Research and development expenses remained high, representing 93% of revenue for the quarter, reflecting continued investment in product development for EV, enterprise, and solar markets.

Financial highlights

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

• Gross margin was 40.3% (non-GAAP), down from 41.5% a year ago; GAAP gross margin was 19.7%.

• Net loss attributable to controlling interests: $22.3 million in Q2 2024 vs. $58.5 million in Q2 2023.

• 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.

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

Outlook and guidance

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

• Non-GAAP gross margin for Q3 projected at ~40% (+/- 50 bps); non-GAAP operating expenses expected to remain flat at ~$21.5 million.

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

• The company expects its tax rate to remain close to zero in the near term due to full valuation allowances against deferred tax assets.

• Current cash levels are considered sufficient to finance operations and capital expenditures for the foreseeable future.