Navitas Semiconductor Corporation

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Novitas Semiconductor Q1 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, simply press star 1 on your telephone keypad. To withdraw your question, press star 1 again. It is now my pleasure to turn the call over to Leanne Savers. You may begin.

Good afternoon and welcome to Novitas Semiconductors' first quarter 2026 financial results conference call. Joining us today are Novitas President and CEO Chris Alexandra and CFO Tanya Stevens. I'd like to remind our listeners that the results announced today are preliminary as they are subject to the company finalizing its closing procedures in and customary quarterly review by the company's independent registered public accounting firm. As such, these results are unaudited and subject to revision until the company files its Form 10-Q for its quarter-ended March 31, 2026. In addition, management's prepared remarks contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore we refer you to a more detailed discussion of the risks and uncertainties in the company's filings with the Securities and Exchange Commission, including Forms 10-K and 10-Q. In addition, any projections as to the company's future performance represent management's estimates as of today, May 5, 2026. Navitas assumes no obligation to update these projections in the future, as market conditions may or may not change, except to the extent required by applicable law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP to non-GAAP items, which provide additional details. For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 90 days in the investor relations section and Navitas website at www.NavitasDenny.com. And now it's my pleasure to turn over the call to Navitas president and CEO. Chris, please go ahead.

Good afternoon and welcome to everyone on the call and webcast. We appreciate you joining us in today's call and pleased to report that Q1 is affecting another quarter of solid progress and growing momentum on our transformation to Natita 2.0, highlighted by the company's return to top-line sequential growth. For all of you that may be new or still coming up to speed on our story, I want to begin with a brief high-level summary of our ongoing strategic transformation and Natita 2.0 vision. Over the past two quarters, we have meaningfully re-accelerated our pivot away from the company's historical mobile and low-end consumer business to focus the entire organization on the high-power markets, where Navitas, GAN, and the High Voltage 6 products can deliver long-term differentiation and value. Today, we are singularly focused on four high-growth, high-value market signals. AI data center, energy and green infrastructure, performance computing, and industrial electrification. Our goal and objective are to rapidly achieve scale in these higher-value markets in support of driving sustainable and profitable growth. Turning to another view of the quarter, our Q1 financial results demonstrated solid quarter-by-quarter improvement, and we observed growing momentum across our high-power markets and expanding customer engagement. Highlighting the quarter, we achieved the expected return to growth in Q1, with revenue increasing 18% sequentially. The renewed growth was driven by our high power markets, which also represented a growing and larger majority of total revenue, as we continued to reduce reliance on the company's historical mobile and mobile consumer business. Although far too early to declare victory, we have effectively completed our realignment of the entire organization. And Navitas is back to growth, driven by our high-power markets. In fact, revenue from our high-power business grew up to 25% year-over-year, with all four of our private high-power end markets increasing sequentially in Q1. The increased contribution from our high-power markets also drove a federal mix in our overall revenue mix, resulting in a poor Q1 growth margin. Consistent with our previously communicated expectation, we anticipate continued sequential top-line growth and gradual gross margin expansion for our services. The ultimate success of our strategic transformation continues to be grounded in four pillars, market focus, technology leadership, operational efficiency, and financial density. With respect to market focus, we continue to see new technology adoption accelerating across multiple end markets and customers. both of which are increasingly driving towards GAN and high-voltage SICK solutions. Without question, AI is the primary catalyst driving this momentum and leading to the broadening adoption of high-power solutions across all four of our five FED markets. Collectively, these markets represent a serviceable, adjustable market of $3.5 billion by 2030. This graph is 60-50 between GAN and high-voltage SICK. We combined CAGR exceeding 60%. We are definitely focused on the largest portion of the time, which I'd like to refer as the AI infrastructure, comprised of unique but relative growth opportunity across the AI data center and the grid energy infrastructure, each of which are fundamentally to enabling the AI revolution. Today, the excessive increase in compute power density is accelerating giant and sick adoption in data centers, while the required modernization of the energy-grain infrastructure to support business centers is driving increased needs for high-voltage systems. Navitas is uniquely positioned as one of the very few companies that can frame deep, long-term experiments in both GaN and high-voltage technologies. We also amnestically and readily offer customers the ability to choose the optimal solution for their acoustic applications and architecture. As a result of our proven capability in both SICK and GAN, we believe it allows us to address more of the power chain and ultimately capture greater content per system. Briefly, providing the trends and opportunities specific to each of our four targeted end markets, starting with AI data centers. As a technology user in both GAN and SICK power delivery, we support all major AI data center architectures with industry-leading power density and efficiency. Again, adding both technologies is a strategic differentiator in our ability to fully support a given customer's chosen approach concept into more opportunities across more applications and greater potential lower-content analytics. As conveyed at the recent NVIDIA GTC event in March, AI data center is rapidly evolving towards ML mode HVDC abstractures, leading to expanding content opportunities driven by the need for exponential power levels increased density, and top-tier efficiency. Our immediate focus remains on the spelling and sampling of our newest GAN and SIG products, enabling qualifications, preparing for scale ramp, and supporting hyperscalers and OEM customers in their ongoing design and development efforts, spanning from ACDC PSUs and DCDC PSUs and 8-level HVDC brick designs at higher power levels and densities. In green infrastructure, we continue to advance active engagement across a series of new and existing customers with notable acceleration in design activity in the active space. AI is a main determinant underlying capitalist. As all industry participants increasingly acknowledge, the existing energy grid is not capable of supporting the project in future rollout of AI deployment. This market, where technology and scale are equally important, They present a large and long-term circular growth opportunity for our current and future high-voltage SICK products. Navitas' Genesys technology positions us as a leading enabler of the grid energy infrastructure modernization efforts, providing customers with more reliable and high-intensity power to our recently introduced 2.3 kV and 3.3 kV modules and a roadmap to even higher voltage. In performance computing, we are seeing sustained healthy adoption of GAN in higher power chargers, pollution, for high-end laptops and mobile workstations used for gaming and AI development. Our opportunity in this market continues to be driven by the dramatic increase in power requirements, with CPU moving from 15 to 30 watts to 45 to 80 watts in high-end AI notebooks, with the integration of GPU requiring up to 120 1.75 watts. As a result, we expect to benefit from growing demand and momentum in performance computing market applications throughout 2016 and beyond. Finally, in industrial electrification, we are continuing to see customer traction in both giant and ultra-high-voltage sick in high-performance applications, such as DC-DC converters and megawatt chargers, industrial pumps, motor control, and energy equipment applications. With respect to our seven-peer technology leadership, we remain fully committed to ongoing innovation in GAN and high-voltage SICK, driven by focused R&D assistance and demonstrated by expanding customer engagement and co-development projects. On GAN, we have continued to accelerate sampling of our 100-volt and 650-volt devices to more OEMs and ODMs. Customers pursuing the 8-on-1 HVTC aspect today are testing GAN, and we believe most of the way is testing with monetized devices. We are focused on enabling and supporting customers in this transition from silicon to GaN, like we have always successfully done in our past. More recently, we have seen some customers design internal reality system-level testing on our newest GaN devices. During the first quarter, we continue to deepen our collaboration with OEL, OEL, and hyperscalers, including direct demonstration of enabling new GaN-based architecture and feature high power, efficiency, and reliability. all of which is leveraging Maritas' more than 10 years of GaN Express and Syscon Expedit. One of those highlights was our recent release of the 20kW 800V to 6V DC-DC platform using our latest 8x8 650V GaN Fan Fest, aiming at 97.5% peak efficiency. This platform solution was formally unveiled in March at GDC and showcased at NVIDIA NGX. As a reminder, we also previously released an industry-leading 800V to 50V AI DCDC power brick, fully ganged 60V and 100V, delivering best-in-class efficiency and density. These respective platforms are generating strong interest and prospective customer engagement due to their demonstrated ability to deliver the highest power density, efficiency, and performance for next-generation AI-designed architecture. Today, our team remains focused on execution, including product delivery, qualification, and preparation of RAS, targeting the accelerated growth for CamVade head-on-the-board SVDC architecture in 2020. On high-voltage sticks, we continue to strengthen our technology with a focus on high-power density and heavy-duty, which represents both the primary market drivers and our QD3 shaders in terms of silicon and packaging. Following the introduction earlier this year of our new industry-leading Gen 5 genetic technology, based on our patented trench-assisted planar architecture, in March, we released our 1.2 kg Gen 5 6 product tailored in packages to address the higher power and entity DCDC and ACDC needed in PSU applications. We have since delivered samples to OEM and OEL, and they are currently being evaluated by most PSU vendors. Initial customer feedback has been excellent, with reports up to 60% increase in power density at greater than 98% system efficiency and improved cooling. Turning to operational efficiency, the prior restructuring action initiated late last year, which I discussed in detail last quarter, has been substantially completed. As previously mentioned, today the entire organization and its resources are fully aligned to focus on the high power markets. We've prepared a substantial strategy for positioning from where the company was just nine months ago. Our team is moving fast and working very hard, and their collective dedication is impressive. Recognizing the tremendous opportunities ahead, we plan to continue adding selective engineering skills and competencies to accelerate customer support over the coming months. Also during the quarter, we completed our leadership transformation with the appointment of our new CFO, Tonya Stevens, who formally joined the team in late March. We now have the full leadership team in place, including new leaders in operations, engineering execution, sales and marketing, business units, and finance, all of whom joined the company in recent weeks and months from larger companies with strong practicals in execution and scale. Importantly, this new authority team and our employees are demonstrating strong buy-in and excitement for 90 plus 2.0, and it's a privilege to lead this transformation alongside each other. We also want you to make progress on our strategic technology and fund-raising partnership with Global Fundraising on GAN. We are confident this will enable our planned 8-inch pivot in 2027 for GAN manufacturing in the United States. At the same time, we are starting to build appropriate buffers with TSMC to ensure a smooth transition for all existing customers. Additionally, we have begun actively scanning our supply chain to support upcoming growth and demand, and we leverage AI internally across design and most of the functions to allow us to scale even faster. Our fourth pillar is financial discipline, which we are committed to as we execute our scale of plans and transformation to Narita 2.0, a consistently growing and profitable high-power company. This includes remaining diligence with respect to prioritizing of investment in high-power programs, maintaining leveraged OPEX, and focusing on high-margin, long-term engagement that builds multi-generational customer quality features. We made significant progress in Q1 with our previous restructuring effort and full availability towards high-power market now substantially complete. Going forward, we'll continue to drive efficiency across the organization and are committed to disciplined investment in the business, even as we target a much larger market opportunity. Our focus remains on top-line growth and margin expansion, driven by improving scale and mix of our high-power business in support of achieving long-term profitability. In summary, I am very pleased with the continuous progress and growing momentum we have achieved in such a short period of time. We are taking further steps toward positioning Navitas as a high-power company. We anticipate continuous sequential revenue growth in the second quarter and throughout the rest of 2016. Q1 was the first clear proof point, and the growth in the high-power market demonstrated the momentum of our 902.0 strategy. We also anticipate growth margins to steadily improve, as volume, growth, drive better fixed-cost absorption, and our revenue mix increasingly favors the high-power business. Mobile contribution will continue to diminish its quarter and become insufficient by the end. At that time, we expect our business and revenue will be defined almost entirely by a high-power market, a transformation that positions wealth for sustainable long-term growth and profitability. Before I turn the call over to review our functions, I'd like to take this moment to welcome Tonya Stevens, our newly elected CFO. I'm thrilled to have her join our executive team. She brings over 30 years of exceptional practical financial leadership in the semiconductor industry, most recently at Lattice Semiconductor. I look forward to her valuable contribution as we grow the business and scale our operations to a larger financial discipline and profitable company. With that, I'd like to go to Tonya to introduce herself and give you our first quarter financials and second quarter outlook.