Navitas Semiconductor Corporation

Good day. Thank you for standing by, and welcome to the NAVTAS Semiconductor First Quarter 2022 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your host today, Stephen Oliver. Please go ahead.

Good afternoon, everyone. This is Stephen Oliver from Navitas Semiconductors. Good afternoon, everyone. I'm Stephen Oliver, Vice President of Corporate Marketing and Investor Relations. Thank you for joining Navitas Semiconductors' first quarter 2022 results conference call. I'm joined today by Gene Sheridan, our Chairman, President, and CEO, and Todd Glickman, our CFO. A replay of this webcast will be available on the Investor Relations section of our website at at ir.navitassemi.com approximately one hour following this call. And the recording will be available for approximately 30 days following this call. Additional information related to our business is also posted on the investor relations section of our website. Our earnings release and this presentation includes certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures with the most directly comparable gap measures are included in our earnings release and also posted on our website in the investor relations section. In this conference call, we will also make forward-looking statements about future events or about the future financial performance of Navitas. You can identify these statements by words like we expect or we believe or similar terms. We wish to caution you that such forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from expectations expressed in our forward-looking statements. Important factors that can affect Navitas business, including facts that could cause actual results to differ from our forward-looking statements, are described in our earnings release. Please also refer to the risk factors affecting Navitas discussed in our SEC filings including our annual report on Form 10-K, filed on March 31st, 2022. Our estimates or other forward-looking statements may change, and Navitas assumes no obligation to update forward-looking statements to reflect actual results, changed assumptions, or other events that may occur, except as required by law. Now, over to Jean Sheridan, CEO.

Thank you, Steve, and thanks to everyone joining today's call. We continue to focus on building our foundational technology and market leadership position in GAN Power IT. In particular, we are growing our leadership position in the mobile and consumer segments while we expand our technology to address the exciting new opportunities in data center, solar, EV, and related markets. As we announced last week, Navitas has now shipped over 50 million units, reinforcing our number one position in the power GAN market. Q1 revenue grew 27% year-on-year to $6.7 million, and our gross margin of 44% was in line with expectations. Our lead in the fast and ultra-fast charger market was increased by major customer additions. Samsung's flagship Galaxy S22 Plus and S22 Ultra have adopted Navitas GAN technology for their 45-watt fast chargers, our first design win at Samsung and their smallest ever 45-watt chargers. In addition, Vivo has adopted our GAN ICs in-box with their first folding smartphone, the 8-inch screen X-Fold, utilizing our GAN ICs for their 80-watt dual USB-C charger, fast charging from 0% to 100% in only 37 minutes. Motorola's Edge Plus smartphone launched with a 68-watt in-box GAN fast charger with 1 watt per cubic centimeter power density and a 0% to 50% charge time of only 15 minutes. In addition, we are working closely with Motorola on a comprehensive co-op marketing campaign. In the emerging and fast-growing new segment of ultra-fast smartphone chargers, we've extended our leadership position with a number of additional major customer announcements. Xiaomi has adopted our GAN technology for their Redmi AMG Mercedes Formula One Champion smartphone, which utilizes a compact 120-watt inbox charger that achieves 0% to 100% charging in only 37 minutes. Realme's GT Neo 3, launched at Mobile World Congress, utilizes our GaN ICs to deliver the world's fastest charging time, 0% to 50% in only five minutes, and an impressive 1.5 watts per cubic centimeter power density. This translates to big power delivery in a very small form factor. And the OnePlus Ace, utilizing our GaN IC technology for their inbox 150-watt ultra-fast charger. Beyond our significant smartphone GaN market position, Navitas is also leading the way in GaN adoption for notebook chargers. Dell was an early adopter of our GaN IC technology with their 100-watt accessory laptop charger launched in 2020, and we followed with a 60-watt optional GaN charger for Latitude laptops in 2021. We're also announcing another 60-watt charger that is now shipping in-box with the Dell XPS Plus. At the same time, Xiaomi has launched their 14-inch and 15-inch laptops powered by 100-watt in-box GaN fast chargers. and Lenovo Legion 5 Gen 7 gaming laptops with 135-watt Ganfest chargers have launched in April. This 135-watt charger is 40% smaller than legacy chargers at a power density over 1 watt per cubic centimeter. A huge 80-watt-hour battery is charged in only 65 minutes. Navitas GAN is now in mass production with nine of the top 10 mobile OEMs across smartphone and laptops, and we expect all 10 of the 10 by the end of the year. Our technology innovation continues at a rapid pace. Our Generation 3 GanSense technology was launched late last year and has already been adopted for mass production by over 15 customers across multiple end applications, enabling all new levels of energy efficiency, fast charging, and higher power density. This week, at the prestigious PCIM conference in Nuremberg, Germany, we introduced our highest power-rated GanFast power IC with proprietary GanSense technology. The NV6169 delivers 50% more power as a high-reliability building block for applications such as 4K, 8K TVs, next-generation gaming systems, solar microinverters, and 1-kilowatt-plus data center power supplies. We started sampling additional high-power GAN ICs late last year, which target data centers, solar, EV, and other related markets. Customer designs are well underway with dozens of customers across those segments. many of which are accelerated by their cooperation with our data center and EV-focused design center. Both of these design centers offer customers complete capabilities at high frequency, high efficiency, high density GAN-based power system design. Our expectations for additional revenues from these new segments across the next few years remain unchanged. In addition, this quarter we started sampling our Generation 4 GAN ICs on schedule. These enable another 20% cost performance improvement and will serve to further accelerate our GAN IC adoption in our target markets. Quality and reliability continue to be foundational to our company strategy and expansion plan. With our announcement of 50 million units shipped, we also announced an unprecedented achievement of zero reported GAN-related field failures with 192 billion device hours in the field. We have another industry first with our 20-year product warranties. This is 10 to 20 times longer than every other power semiconductor company, reflecting our confidence and our commitment that GaN is not just as reliable as silicon, but actually more reliable, courtesy of our integrated protection and robustness circuits and our unique and exhaustive GaN reliability programs. When we combine these achievements with 5.8 billion device hours of accelerated reliability testing, we are delivering the level of confidence that our customers need to rapidly transition from silicon to GaN in the multi-billion dollar high reliability markets of solar, data center, EV, energy storage, and beyond. Finally, I want to update all of you on our sustainability initiative. Over the last three years, we have carefully assessed the environmental benefits of both GaN as a next generation material and Navitas is a next-generation semiconductor company. In January, we published the industry's first wide bandgap sustainability report that comprehensively quantifies the positive impact of GaN-powered semiconductors on climate change based on global standards. Today, we're excited to announce that Navitas is the first semiconductor company worldwide to achieve carbon-neutral company status from the leading experts in carbon neutrality and climate finance, Natural Capital Partners. Achieving carbon neutral status is another milestone in our mission to use wide bandgap materials to electrify our world and help our customers reach their own environmental goals. With all of these positive achievements for our company, we do want to recognize some short-term turbulence, specifically in China, given the COVID-related shutdowns and some softness in the China smartphone market. These two factors, in combination with some continued non-GAN component shortages, are expected to have some impact on our growth rate in Q2. Fortunately, we see strength in other regions outside of China, which helps us to maintain a strong Q2 sequential and year-on-year growth rate, albeit with a mix-related modest reduction in our gross margins. Despite these short-term challenges in China, I want to reiterate the strong fundamentals that are driving our business. The electrification of our planet and a transition of the $13 billion power semiconductor market from silicon to GAN is an underlying secular multi-decade tailwind for our companies. Navitas is number one in fast and ultra-fast chargers, and even though we've shipped over 50 million units, this still represents only about 2% of the charger market, less than 1% of the overall legacy silicon opportunity, leaving dramatic adoption and growth ahead. Our GAN IC lead times remain low between 6 and 16 weeks, and this is accelerating GAN adoption given continued semiconductor shortages with power silicon lead times in the 6-plus month range. We maintain a very healthy balance sheet with over $250 million of cash on the books, which gives us confidence to reach our targeted profitability by 2024 and to pursue strategic M&A activities, which will accelerate our top-line revenue and increase our customer value as we pursue our mission to become the next-generation power semiconductor leader. And finally, GAN remains a revolutionary once-in-a-lifetime opportunity to disrupt and redefine the field of power semiconductors and power electronics. Thank you, and let me now turn it over to our CFO, Todd Glickman.