Navitas Semiconductor Corporation

Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Navitas Semiconductor Third Quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. I'd now like to turn the call over to Lori Barker, Investor Relations. You may begin.

Good afternoon, everyone. I'm Lori Barker, Investor Relations for Navitas. Thank you for joining Navitas Semiconductor's third quarter 2025 results conference call. I'm joined today by Chris Alexandra, President and CEO, and Todd Glickman, CFO. A replay of this webcast will be available on our website approximately one hour following this conference call and available for approximately 30 days. Additional information related to our business is also posted on the Investor Relations section of our website. Our earnings release includes non-GAAP financial measures. Reconciliation of these non-GAAP financial measures with the most directly comparable GAAP measures are included in our third quarter earnings release and also posted on our website in the investor relations section. Non-GAAP expenses and operating margin exclude stock-based compensation, amortization of intangible assets, and other non-recurring items. In this conference call, we will make forward-looking statements about future events, our future strategy, or the future financial performance of Navitas. We may make predictions or describe trends in our industry and markets. You can identify some of these statements by words like we expect or we believe or similar items. We wish to caution you that all such forward-looking statements are subject to assumptions, 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 Navitross's business include factors 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 section in our most recent 10-K and 10-Q. Our actual performance may differ from our projections and our estimates. Assumptions and strategies may change. Navitas assumes no obligation to update forward-looking statements to reflect actual results, changed circumstances, or other events that may occur except as required by law. And now, over to Chris Alexandra, CEO.

Good afternoon, and thank you for joining us. I am very excited to have the opportunity to address you today. I have now been in my role for approximately 60 days, and I would like to take this opportunity to share with you my vision for the future of Navitas. I will start by saying that I feel incredibly proud to be leading the Navitas team, a world-class team that has been at the forefront of both carbon nitride, or GAN, and high-voltage silicon carbide, or SICK, since the very beginning of their development. Day marks a crucial moment for Navitas as we enter a transformation of our company. Over those last 60 days, I've been on the road meeting and collaborating with customers, employees, suppliers, and partners. That strategic tour gave me a clear view of our strengths and challenges, and most importantly, the opportunity ahead. The conclusion is straightforward. Navitas is a company with enormous potential. underpinned by strong conventional elements already in place in both GAN and high-voltage SIC. And we have a tremendous opportunity to win in high-power, high-growth markets such as AI data centers, performance computing, energy and grid infrastructure, and industrial electrification. Customers are eager to adopt both technologies into their application, and we have the experience and track record of delivering those technologies in scale and volume, and they want to collaborate. Simply put, we are in the right markets with the right technologies, and we can win with focus on strong execution. We will accelerate, pivot, and double down on those high-power markets and customers as we move away from consumer and mobile. I call this Navitas 2.0 a transformation to a high-power, sharp-focused company serving grid to the GPU to drive more consistent, profitable, and sustainable results. Before we dig into what we are doing, let's quickly cover what is happening in the market right now. Across the entire market, electrification is accelerating and moving up in power demand. AI data centers necessitate reactivating power distribution to achieve higher efficiency and density. and they are doing so exponentially. In parallel, the energy grid is transforming with storage, solid-state transformers, utility-scale renewables, and megawatt charging to support the AI catalyst, but also the overall growing energy demand. This is not a short cycle. It is a durable, multi-decade, sustainable trend that will reshape power architecture at rack, system, and grid tile levels. This requires fundamental change in customer system architecture, design and technologies, and simply means the total market size Navitas is addressing has increased multiple folds. It opens immense opportunities for high-power players such as Navitas 2.0. I spoke to a variety of customers over the last 60 days. Every single customer I met in those segments, from leading U.S. hyperscalers and AI GPU vendors, Performance computing OEM and ODM to the many and very innovative customers needing a complete re-architecture in the energy grid told me the same message. GAN and high-voltage SICK technologies are the solution to the problem they are trying to solve and the revolution they are driving. And they've united us to the center of this transformation, given our long history and track record in shipping goals at scale. We have heard that message loud and clear, and therefore will immediately accelerate accordingly. We are one of the few companies with a complete high-power portfolio. GaN, GaN integrated with IC, and high-voltage FIC. This combination, along with very strong system expertise built over the last many years, offers more value to customers. Ten years ago, Navitas was looking ahead at global energy demand was projected to grow by 200% to 300%, doubling to tripling over the next decade. EV, wind turbine, cloud computing, data centers, solar power, climate change, quantum computing, all those energy platforms requiring significant reformats to consume efficient high-voltage technologies which did not exist at that time. This enormous forecasted demand made it clear that power electronics would need transformative leap in efficiency and power level. Standing back, it was obvious even 10 years ago that existing silicon-based chip and technology would simply not get us there. And we didn't even consider AI and its power-angry implications back then. Navitas led the introduction of GaN into power electronics, leapfrogging established silicon players. Then we acquired and merged with Genesys, the leading advanced technology in high-voltage SICK. It shipped over 300 million GaN units with proven quality and reliability over the last seven years. And Genesys brought leading-edge high-voltage SIG technology, both together enabling power architectural evolution in AI data centers, performance computing, energy and grid infrastructure, and industrial electrification. GaN is now mainstream for AI data centers, performance computing, and industrial electrification. The NVIDIA 800-volt DC AI factory ecosystem announcement is the first proof point, and we expect it to be adopted across many other players. iVoltage Thick is also supporting and enabling the energy grid transformation necessary to enable AI and the associated demand for more power. Both markets are intertwined. Underneath our portfolio are long-standing partnerships with leading fabs, backend and module partners, a deep co-design with customers, and a very advanced solution and system architecture understanding, with more than 300 patents issued or pending. Our team has been on the forefront of GAN and high-volume SICK from the early days, now reaching over two decades combined, and that experience matters when customers move fast and execution is critical. Going back to Navitas 2.0, and the transformation from a mobile and consumer-focused foundation to a high-power company. That pivot is backed by decisive action that we have begun to take. Number one, resource realignment. We are relocating engineering, commercial and application support, and R&D program towards high-power platforms and customers. We're ensuring we have the right people in the right markets and the right geographies, led by a renewed global high-performance leadership team. Number two, roadmap acceleration. We are accelerating the release of new product tailored to high-power markets targeted at rack, system, and grid-type nodes. We expand medium-voltage GaN devices, high-voltage GaN devices in IC, and high-voltage six-module. Number three, go-to-market restructuring. We are focusing on hyperscalers, GPU vendors, Tier 1 OEM and ODM, and leaders in our focus markets. AI data centers, performance computing, energy and grid infrastructure, and industrial application. We intend to streamline our distribution network to align with those high-power focus market. This will also mean a change in geographical resource deployment, including creating a stronger presence in the U.S., where we have growing and promising engagement. Number four, portfolio and customer pooling. We are deprivatizing lower-margin stock lifecycle project. transactional markets, and customers such as mobile and selected China-based segments to redeploy capacity and attention to durable, high-power programs. Our focus is on the long-term engagement where technological innovation makes a difference. We believe this will ultimately drive high-quality business with greater predictability, consistency, and a higher margin. Overall, this change will impact our business model. High-power engagement are indeed deeper, longer-lasting, and multi-generational. We may often engage across multiple subsystems within the same customer. Some served by GAN, others served by Harvard TechSec. That breadth is expected to increase win rates, raise the blended margin, and produce more predictable, appetible revenue compared with transactional, lower-margin segments such as mobile. This is the foundation for Navitas 2.0, a scalable, profitable and sustainable enterprise. At the OCP Global Summit, NVIDIA named Navitas a power-selected partner for its next-generation 800-volt DC AI factory power architecture. That validates our ability to serve the entire power path, from the grid to the GPU. In support of this ecosystem, we announced our first 100-volt GaN FETs, alongside our portfolio of 650 GaN discrete FETs and our GaN SafeIC and expanded high-voltage SIC products. This is our first formal entry into medium-voltage GaN, the critical range for AI server power stages and rack-level distribution. We're sampling now 2.3 kilovolt and 3.3 kilovolt high-voltage SIC modules to leaders in battery energy storage systems, solid-state transformer programs, and megawatt charging. The strategy and opportunity are clear. To get there, our plan is grounded in four pillars. Number one, market focus. AI data centers, performance computing, energy and grid infrastructure, and industrial education. We will stay sharply focused on those high-power markets only. Number two, technology and manufacturing leadership. Continuous innovation in GAN, GAN IC, and high-voltage SIC informed by customer requirements and co-designs. We have a strong foundation in technical innovation and will continue to lead the industry. We will also expand our manufacturing footprint to better serve our high-power customers. You may also see us doing more partnership to enable faster adoption. Number three, operational efficiency. A streamlined and rebalanced geographically deployed organization to scalable foundry and packaging and module partnerships. Number four, financial discipline, prioritized investment, leverageable OPEX, and a shift towards high-margin programs. In the near term, this transformation will have an impact, including a reduction in guidance before returning to growth. We expect Q4 to mark the bottom as we take decisive action, including reducing channel inventory, consolidating distribution channels, and adjusting our inventory to better align with our new high-power markets and customers. By deprioritizing lower-margin revenue and redirecting our roadmap and investment away from non-high-power businesses, we believe we will accelerate our transformation and gradually improve the overall quality and profitability of our business throughout 2026. This is expected to yield more consistent growth and margin expansion. We'll continue to provide transparent updates on our progress throughout this transition to ensure accountability at every step. AI data centers and performance computing are already shaping product environment and designing and design wins. On the AI data center front, we expect material P&L contribution starting 2027. Our work with NVIDIA and other hyperscalers, GPU vendors OEM and ODM, however, established already in 2026 a durable designing foundation for long-term growth. On performance computing, we continue to make progress in engagement as GAN technology is gaining rapid adoption in higher power, and we expect this to drive growth already in 2026. In parallel, energy and green infrastructure are multi-billion dollar markets with multi-decade opportunities where high-voltage SICK is exceptionally well-suited to a customer or not. As we embark in this transformation and execute this transition, we will share information for you to track our progress through transparent and clear update in the following area. First, a sharper focus on high-power account and program, which will be seen in growing importance and weight in our revenue, driving a change in mix. Second, operating expense, financial discipline, and return on investment-driven roadmap decision solely focused on the Navitas 2.0 North Star. Third, gradual gross margin improvements. As we reduce lower value shipments, grow more higher power engagement, and overall improve the mix. In conclusion, our GAN and GAN IC built a strong presence in mobile fast charging, and we are very proud of the 300 million units shipped. This gives us an in-depth understanding and takes a remote, and this is the business that brought us to where we are today. We have complementary high-voltage technology, products, and modules, enabling us to cover more of this high-power chain. High-power markets are different and more rewarding. Engagement are deeper, path cycles are longer, and the value we deliver is measured in system-level performance and efficiency over multiple generations. This is where Navitas 2.0 will focus on. We're executing a clear pivot to high growth, high power markets, focusing on AI and data centers, performance computing, energy and grid infrastructure, and industrial electrification, anchored by a complete GAN plus high-voltage SIG portfolio, with long-standing customer relationship and discipline operation. We're aligning organization, resource allocation, roadmap, and channels to the markets that matter, We firmly believe that the change we are making will improve the quality of our business and position us for sustained growth and margin expansion throughout 26 and beyond. From the grid to the GPU, Navitas 2.0 is a high-power company built for scale and profitability. Thank you to our employees, customers, suppliers, and partners for their support during this transition. I look forward to deepening our partnership with stockholders, analysts, and investors with transparent updates as we execute. With that, I'll turn the call over to Todd to review our third quarter results and our guidance. After Todd's remarks, I'll return for Q&A, including detailing our high-power Navitas 2.0 strategy, the actions behind the transformation, and what it means for our business. Thank you.