Navitas Semiconductor Corporation (NVTS) Earnings

Management highlights

### Strategic Transformation (Navitas 2.0) - The strategic pivot from mobile/low-end consumer markets to focus on high-power GaN and silicon carbide (SiC) products, centered on AI infrastructure, is substantially complete, over one quarter ahead of original schedule - Revenue composition has completely shifted, with almost all revenue coming from high-power markets by the end of 2026, and the transformation is delivering consistent, on-plan progress - Navitas maintains a technology-agnostic approach, offering both GaN and high-voltage SiC to meet customer needs, which is cited as a key competitive differentiator ### AI Infrastructure Market Opportunity - Management outlines four sequential inflection points for growth from the 800V DC transition in AI data centers: 1. H2 2026 ramp accelerating in H1 2027: SiC adoption in AC-DC PSUs driven by power scaling and density requirements, independent of full 800VDC native architecture, already underway 2. Mid-2027 ramp: 800V bus bar introduction in sidecar power racks, adding new SiC and GaN content for AC-DC PSUs, top-of-rack DC-DC PSUs, and battery backup units (BBUs); Navitas is in advanced design and testing with key customers 3. Mid-to-late 2027 ramp accelerating in 2028: Native 800V integration of high-density DC-DC conversion directly into GPU/XPU trays, where GaN is required for superior switching frequency and power density at megawatt scales 4. 2028 and beyond: Solid-state transformers (SSTs) that convert utility grid mid-voltage AC directly to 800V DC, creating end-to-end wideband gap content opportunity - Complementary large, long-term opportunity in grid and energy infrastructure; 2.3kV and 3.3kV Genesys modules are receiving strong customer feedback, with volume sample requests for H2 2026 testing, and the new isolated TO247 product family is seeing early interest for liquid cooling applications ### Technology and Product Roadmap - Continued investment in innovation for both GaN and SiC: GaN portfolio has industry-leading low RDS(ON) devices and a broadly adopted high-density DFN 8x8 package, with new 800V reference platforms in development for data center topologies - SiC technology based on proprietary trench-assisted planar architecture offers industry-leading scalability, efficiency, and manufacturability; new 1.2kV JFET product line launching in early 2027 targeting AI data center, SST, and grid applications, adding $1 billion incremental serviceable addressable market (SAM) by 2030 - 6.5kV SiC technology planned for release in Q3 2026, with next-generation 10kV SiC development underway with a lead customer, expected to be announced shortly ### Strategic Partnerships and Operations - Announced a strategic technology licensing partnership with MagnaChip (Magnetshift) for Genesys Gen4/Gen5 SiC technology, to be ported into MagnaChip's South Korean fab; the partnership expands SiC technology adoption into new end markets and adds an additional source of SiC wafer capacity to improve supply chain resilience - Transition to 8-inch GaN manufacturing with GlobalFoundries is on track, with customer sampling and qualification expected before end of 2026 and initial qualified products in early 2027; buffer capacity has been secured at TSMC to ensure a smooth transition for existing customers - Supply chain is streamlined through consolidation to fewer, more strategic OSAT partners better equipped for high-power volume scaling; AI tools are increasingly leveraged across design and operations to improve efficiency and accelerate execution ### Financial Discipline - Operating expenses were held essentially flat over the past nine months during transformation, with a prudent 10% (~$1.0-$1.5 million) quarterly increase planned starting in Q3 to fund product development, customer support, and volume ramp preparedness; OpEx growth will remain meaningfully below revenue growth - The company raised $373 million in new capital during Q2, ending the quarter with $557 million in cash and no debt, providing ample flexibility to fund strategic investments and pursue selective strategic opportunities - The company remains committed to a long-term path to profitability, with top-line growth as the primary near-term priority

Guidance

- Q3 2026 revenue is expected to increase 28% sequentially to a range of $13.0 million to $14.0 million (midpoint $13.5 million); at the midpoint, this represents a return to year-over-year revenue growth, driven entirely by high-power and AI infrastructure markets - Non-GAAP gross margin for Q3 is expected to be 39.7% (plus or minus 100 basis points), a 20 basis point sequential increase at the midpoint, driven by continued favorable mix shift to high-power products and improving scale - Non-GAAP operating expenses for Q3 are expected to range between $15.5 million and $17.5 million, representing a moderate 10% increase at the high end, below expected top-line growth - Full year 2026 is expected to deliver mid-single-digit total revenue growth, with continued double-digit quarterly sequential growth through H2 2026, ahead of prior expectations for the transformation timeline - Management reaffirmed confidence in continued growth momentum through 2027, driven by the staged rollout of 800V AI data center inflection points that will create compounding growth, with no change to long-term growth outlook from recent market chatter about 800V architecture delays

Segment performance

Total Q2 2026 revenue was $10.5 million, a 22% sequential increase from Q1 2026. High-power segments (including AI infrastructure, performance computing, and industrial/grid electrification) grew more than 50% year-over-year, and represent the majority of total revenue. Mobile and low-end consumer segments contributed an insignificant share of revenue in Q2, with a sequential and year-over-year decline, and are expected to become effectively negligible by the end of 2026. By the end of 2026, AI infrastructure (combining AI data center and grid energy infrastructure) is expected to represent over one-third of total annual revenue. Gross margin for Q2 was 39.5% (non-GAAP), expanding 50 basis points sequentially and 100 basis points year-over-year, driven by the favorable mix shift to higher-value high-power products. Operating expenses (non-GAAP) were $15.5 million in Q2, up $0.5 million sequentially but down from $16.1 million year-over-year. Operating loss was $11.4 million in Q2, flat sequentially compared to a $10.6 million operating loss in Q2 2025.

Risks & headwinds

- Pending patent infringement litigation from Wolfspeed, and additional litigation from Renesas (which holds a 39% stake in Wolfspeed), filed in the week prior to the earnings call; management characterizes the litigation as a coordinated campaign of intimidation rather than a substantive IP dispute, but litigation could create operational and financial distraction - The 800V native architecture transition in AI data centers is unfolding in stages across multiple hyperscalers, component vendors, and platform generations, so near-term revenue growth depends on the timing of customer design wins and production ramps that may not proceed as expected - High-power SiC and GaN supply chain capacity scaling is critical to meeting accelerating customer demand; any delays in bringing new manufacturing capacity online or securing wafer supply could limit revenue growth - Product development for new higher-voltage SiC products and next-generation GaN platforms could face technical delays that impact time-to-market and design win capture

Analyst Q&A

• Q: Market chatter suggests 800-volt AI data center architectures may be delayed, including reports of NVIDIA's Kyber Rack cancellation. Does this impact Navitas' 2027 revenue outlook? /

  A: Management reiterates that the 800V transition unfolds in multiple staged inflection points, not a single company-specific launch. The first inflection (SiC adoption in AC-DC PSUs for higher power density) is already underway, and the second inflection (800V sidecar racks) will drive increased GaN and SiC content even before native 800V launches. Having both GaN and SiC allows Navitas to capture content across all stages of the transition. There is no change to Navitas' 2027 growth outlook as a result of recent market rumors.

• Q: Can you share details on the Magnetshift (MagnaChip) SiC licensing deal structure, and do more licensing deals are expected? /

  A: Management states the primary goals of the partnership are not near-term licensing revenue, but rather expanding the total SAM for Navitas' SiC technology: MagnaChip will use the technology in markets Navitas does not serve, creating incremental reach rather than competition. The partnership also creates an additional source of SiC wafer capacity, improving Navitas' supply chain resilience for future high demand. Navitas is not actively seeking broad licensing, but is open to additional strategic partnerships that align with these goals.

• Q: With 2027 growth approaching, how much of that growth is already supported by committed programs versus still in qualification? /

  A: Management does not break out a specific percentage, but notes growth is supported by dozens of programs across multiple hyperscalers, OEMs, ODMs, and power product categories (AC-DC, DC-DC, BBUs), not just one large pending design win. Many programs are already ramping in the pre-800V first inflection, with additional programs moving through qualification ahead of the 2027 inflection points. Management confirms the transformation to high-power is already one quarter ahead of plan, with stronger current momentum than expected six months ago.

• Q: What is your outlook for price increases across GaN and SiC products, in line with broader industry trends? /

  A: Management acknowledges that broad industry silicon price increases are occurring, but does not comment on specific customer pricing. Navitas' current priority is driving customer adoption of new wide-bandgap technologies and architectures, so price increases have not been a core focus in its core high-power target markets to date.