Navitas Semiconductor Reports Mixed Q3 Results, Revenue Growth and Improved Losses

Navitas Semiconductor Corporation reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, Navitas generated net revenues of $21.7 million, a slight decrease of 1% from $22.0 million in the same period of 2023. However, for the nine months ended September 30, 2024, revenues increased by 22% to $65.3 million, up from $53.4 million in the prior year. This growth was attributed to improved sales volumes and market share in the power semiconductor sector, particularly in gallium nitride (GaN) and silicon carbide (SiC) devices.

Operating expenses for the third quarter rose to $37.6 million, a 5% increase from $35.7 million in the prior year, driven by higher research and development costs, which increased by 8% to $17.8 million. Selling, general, and administrative expenses also saw a 4% rise to $15.0 million. Despite the revenue growth for the nine-month period, total operating expenses increased to $117.8 million from $111.4 million, leading to a loss from operations of $91.7 million, consistent with the previous year.

Navitas reported a net loss of $18.7 million for the third quarter, a significant decline from a net income of $7.5 million in the same quarter of 2023. For the nine months, the net loss improved to $44.7 million from $113.4 million, indicating a 61% reduction in losses year-over-year. The company attributed this improvement to a substantial gain from changes in the fair value of earnout liabilities, which amounted to $42.9 million for the nine-month period, compared to a loss of $25.5 million in the previous year.

As of September 30, 2024, Navitas had cash and cash equivalents of $98.6 million, down from $152.8 million at the end of 2023. Total assets decreased to $419.4 million from $485.5 million, while total liabilities significantly dropped to $38.6 million from $104.9 million, reflecting a reduction in current liabilities.

Strategically, Navitas completed a public offering in May 2023, raising $86.5 million for working capital and potential acquisitions. The company also announced a cost-reduction plan in October 2024, which includes a 14% reduction in headcount, aimed at streamlining operations in response to changing market conditions. Additionally, Navitas made a $2.5 million investment in preferred interests in a third party, increasing its ownership stake.

Overall, while Navitas Semiconductor Corporation experienced revenue growth in the nine-month period, it faced challenges in profitability and cash management, prompting strategic adjustments to enhance operational efficiency.