Q1 2025 Navitas Semiconductor Corp Earnings Call

Good afternoon. Thank you for standing by and welcome to the BTS Semiconductor first quarter 2025 financial results conference call. Please be advised today's conference is the E-Recorded and a replay will be available on Navitas Investor Relations website.

Speaker Change: I would now like to hand the conference over to Laurie Barker, Investor Relations. Please go ahead.

Speaker Change: Good afternoon everyone, I'm Laurie Barker, Investor Relations for Navitas. Thank you for joining Navitas Semiconductor's first quarter, 2025 Results Conference call.

Speaker Change: and joined today by Gene Sheridan, our president, CEO and co-founder, and Todd Glickman, CFL. A replay of this webcast will be available on our website approximately one hour following this conference call, and available for approximately 30 days.

Speaker Change: Additional information related to our business is also posted on the Investor Relations section of our website.

Speaker Change: 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 first quarter earnings release and also posted on our website in the Investor Relations section.

Speaker Change: non-GAAP expenses and operating margin include stock-based compensation, amortization of intangible assets, and other non-repearing items. In this conference call, we will make forward-looking statements about future events or about the future financial performance of Navitas.

Speaker Change: You can identify these statements by words like we expect, we believe, or some more terms.

Speaker Change: 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.

Speaker Change: Important factors that can affect Navitas's business, including 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 sections in our most recent 10K and 10K.

Speaker Change: Our estimates or other forward-looking statements may change, and Navitas assumes no obligation to update forward-looking statements to reflect actual results. Change to assumptions or other events that may occur except is required by law, and now over to Gene Sheridan, DEO.

Gene Sheridan: Thanks to all of you for joining our Q-125 Ernie Skull. Our Q-125 revenues came in line with guidance at 14 million and 38 percent gross margin.

Gene Sheridan: While the slowdown in channel inventory and ED, solar and industrial continues to present some near-term headwinds in our business, I want to walk you in number of important recent market and product developments that I expect will set up for strong 2026 as the market recovers and many design ones kick in later this year.

Gene Sheridan: In Q1, we now ask the industry's first production release of a bidirectional DNIC.

Gene Sheridan: As we described in our online launch event, an available video, Dan Idirectional Switches or BDS is a revolutionary new technology that creates an ideal switch that the industry has never seen in 40 plus years of power semiconductor developments.

Gene Sheridan: No other power semi-device in the industry's history across Silicon, Gann or Silicon call that has achieved this ideal combination of capabilities.

Gene Sheridan: Dan BDS makes it technically and commercially feasible to reduce traditional stage converters that are used in over 70% of power electronics into one single stage while enabling bi-directional energy flow.

Gene Sheridan: Dan BDS eliminates dozens of large and expensive components in that second stage, resulting in size, weight, cost and

Gene Sheridan: When combined by our new ISOFAST family of high-frequency isolated drivers, this hips that creates new opportunities to accelerate GAN adoption with these single-stage converters into ED on-board chargers, solar microinverters, charging and desk charging of energy storage systems, motor control applications and others.

Gene Sheridan: The first customer adopting our GNBDS is in solar microinverters and expects to ran later this year, and we expect others to ran throughout 2026 in the number of applications mentioned.

Gene Sheridan: In addition, we announced our Gan State technology has now been auto-motiv-qualified to the challenging AEC-201 standard, and our Gan State has been adopted in the industry's first Gan EV on-board charger design with Changan Auto, a top EV maker in China with expected production in early 26.

This is a major industry-first achievement.

Gene Sheridan: Additional GAN ED wins are expected to also ramp throughout 2026, as Navitas is tidying GAN adoption into an entire new mainstream market of electric vehicles.

Gene Sheridan: We have released a comprehensive Gan Reliability Report, which not only highlights this major Q1-1 automotive qualification achievement, but demonstrates our aggregate field reliability track record, which spans seven years since first-gan production release in 2018.

Gene Sheridan: Over this time, we've advanced the technology and its reliability across four generations and continue to design innovations and integrations that have translated into an aggregate 250 million unit ship and a continuous improvement in field reliability.

Gene Sheridan: that has now reached an unprecedented 100 parts per billion failure rate far exceeding any industry requirement.

Gene Sheridan: In a similar fashion, we've spent the last two years since the Genetic Acquisition, improving and demonstrating the extraordinary reliability performance of our Genetic technology.

Gene Sheridan: We will soon be announcing a new reliability standard we call AEC Plus, which exceeds the stringent automotive AEC standards by 100% or more from many of the industry-restandered reliability tests and a compared to our testing of competitive technologies.

Gene Sheridan: When we combine this impressive reliability achievement with our demonstrated ultra high voltage capability, enabling silicon carbide to support 2.3 KB and up to 6.5 KB.

Gene Sheridan: We are pioneering reliability and voltage capabilities, potential in enabling new energy markets, that include next generation megawatt applications, fanning EV fast chargers, energy storage, renewable energy, and grid infrastructure upgrades.

Gene Sheridan: Stay tuned for many more market developments and customer wins on this front.

Gene Sheridan: Also, while passenger battery electric vehicles have seen some slowdown and inventory corrections, we're excited to announce adoption of our selling carbide technology with two significant commercial EV customers.

Gene Sheridan: It requires much higher power, higher voltage, higher reliability, plus higher silicon carbide content, a perfect fit for our genocic technology. We're happy to announce two significant wins in this space, which we expect to enable a multi-million dollar impact in 2026.

Gene Sheridan: In data centers, AI continues to drive a dramatic increase in total power, power density and power efficiency.

Gene Sheridan: Navitas continues our significant system design progress, utilizing the latest Genetic and GAN State by CES, including new Intelli-Consrol technology.

Gene Sheridan: where we started with a 2.7 kilowatt design last year and then pushed power levels in new system designs to 3.2 kilowatt, 4.5 kilowatt, 8.5 kilowatt, and today, I'm pleased to announce a new 12 kilowatt design that we will formally launch and call a few texts later this month.

Gene Sheridan: Glove Kilot represents an industry first for data centers and this platform is only possible with a combination of GAN and solar and carbon technologies, a perfect set for a pure-play wide-dand-gap capabilities.

Gene Sheridan: While most initial black-well-based systems are utilizing power-spite designs in the range of 4.5 kilowatt, this 12 kilowatt platform will enable black-well, black-well ultra, and future-rooted platforms to more than double the total rack power to as much as 500 kilowatts.

Gene Sheridan: We already have over 75 customer projects in production or development using either sewing car vets, Dan or both, and expect this type plan to accelerate with this 12 kilowatt launch.

Speaker Change: Last week, we announced some board and executive changes which we believe will accelerate the company's transition from early growth stage to much greater scale and profitability.

Speaker Change: To enhance our governance, we have separated the chair and CEO roles and announced Rick Hendrix as our new independent chair. Rick has been on the board since our IPO and brings significant capital markets and executive leadership skills to the role.

Speaker Change: We also announced our CTO-COO Dan Kinser is transitioning into a technical advisory role with the anticipation of a new incoming COO that we expect to announce in the near future.

Speaker Change: Fett Navitas, and throughout my career, Dan has been a great friend and business partner and has been instrumental in the creation of Navitas over the last 10 plus years.

Speaker Change: While his executive role is changing, we look forward to Dan's world-class innovation contributions going forward, his new advisory role.

Speaker Change: Let me summarize the significant market and technology developments that I've described today. Our high-powered GANISEs and solar and carbon technologies are very well positioned to open up all new markets for Navitas, and in many cases for the industry.

Speaker Change: Dan Sakes and Genetic Technologies are ramping into mainstream AI data center applications throughout this year. Hydration again is a game changing technology that we expect will start enabling next generation solar microinverters in the second half of this year.

Speaker Change: Gantt Safe is now auto-qualified and will be the first Gantt adopted in mainstream ED applications expected to begin production early next year.

Speaker Change: Genetic technology is now qualified to far exceed these automotive reliability standards and obtaining important share in commercial ED applications.

Speaker Change: Combined with our ultra high voltage capability of 2.3 KV or higher, Genetic is an enabling technology for a broad range of new energy, megawatt applications that are critical to fulfill our mission to electric our world. Now, let me turn it over to Todd to discuss our financial performance and outlook.

Todd Glickman: Thank you, Gene. In my comments today, I will take you through our first quarter 2025 financial results and then I'll walk you through our outlook for the second quarter, along with our current view on how recent market and care of dynamics may impact our business.

Todd Glickman: Revenue in the first quarter of 2025 was at the midpoint of guidance at 14 million. As expected the sequential decline was due to seasonality and soft demand with associated remaining inventory corrections.

Todd Glickman: The decline compared to a year ago quarter, which primarily the result of lower revenues in the EV and solar markets.

Todd Glickman: Before addressing gross profit and expenses, I'd like to refer you to the gap to non-GAAP reconciliation in our press release earlier today. In the rest of my commentary, I will refer to non-GAAP measures .

Todd Glickman: Gross margin in the first quarter was 38.1%, which was downed sequentially compared to 40.2% in the fourth quarter, primarily due to less

Todd Glickman: In the first quarter, we executed on further synergies and operational efficiencies associated with prior acquisitions and we reduced operating expenses sequentially to 17.2 million, which is ahead of scheduled cost reductions.

Todd Glickman: Operating expenses were comprised of SGNA expenses of $8.3 million and R&D expenses of $8.8 million.

consolidating certain support and engineering functions and sites.

Todd Glickman: and further streamlining the business demonstrates our ability to balance operational efficiency while we continue investing in next-generation GAN and thick technology and in market developments primarily in the data center EV and mobile sectors.

Todd Glickman: Adding all this together, the first quarter 2025 loss from operations improved sequentially.

Todd Glickman: to 11.8 million from 12.7 million in the fourth quarter, 2024, with cost reductions more than offsetting quarter over quarter revenue decline. Our weighted average share count for the first quarter was 188 million shares.

Todd Glickman: Turning to the balance sheet, accounts receivables sequentially declined to approximately 12 million from 14 million in the prior quarter, and inventory remained relatively flat at 16 million.

Todd Glickman: Our balance sheet remains very strong as we exit Q1 2025 with high levels of liquidity and an improved working capital position.

Todd Glickman: Cash and cash equivalents at quarter-end were 75 million and we continue to carry no debt.

Todd Glickman: Moving on to guidance for the first quarter, we currently expect revenues in the range of 14 to 15 million, reflecting continued softness and industry-wide inventory corrections in solar, EV and industrial end markets.

Todd Glickman: The impact of tariffs is dynamic and we are continuing to monitor the latest updates, particularly between China and the US.

Todd Glickman: While Sik represents a minority of our total revenue, our products are produced in the U.S. at X-Fab and the majority is sold in China.

Todd Glickman: Ultimately, our U.S. stick manufacturing location will provide Navitas over time with a significant strategic advantage with our U.S. customers for EV, solar, energy source, and grid infrastructure.

Todd Glickman: We anticipate GAN revenues which represent the significant majority of our revenue today to have a very limited direct impact from tariffs as our GAN products are manufactured in Taiwan and are sold predominantly outside the U.S.

Todd Glickman: Despite the terror risks in our China-Sick revenues in the second half of the year, we continue to anticipate growth to resume toward the end of the year, fueled by our strong design winds across AI Data Center, solar EV and mobile sectors.

Todd Glickman: Gross margin for the second quarter is expected to be slightly higher than the first quarter, with our guidance at 38.5% plus or minus 50 basis points as our expected mix continues to lean toward the mobile market in the near term.

Todd Glickman: in the second quarter, down from 17.2 million in Q1 2025 as we continue to execute on our plan of streamlining the business across mobile, data center, and EV to drive the business

Todd Glickman: For the second quarter of 2025, we expect our weighted average share count to be approximately 194 million shares.

Todd Glickman: In closing, while we are thoughtfully navigating the near-term softness in some of our end-market,

Todd Glickman: We expect our significant designers and the technology advances that are enabling new market developments in AI Data Center

Todd Glickman: Solar Micro Emerters, EV, and broader new energy markets to put us in a strong position to drive growth later this year and throughout 2026.

Operator, let's begin the Q&A session.

Speaker Change: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join a queue. If you would like to withdraw your question, simply press star 1 again.

Speaker Change: If you are called upon to ask your question and are listening via speakerphone in your device, please pick up your handset to ensure that your phone is not on mute when asking your questions. Again, press star 1 to join the queue.

Speaker Change: And our first question comes from the line of Ross Seymore with Deutsche Bank. Your line is open.

Ross Seymour: Hi guys, thanks for asking a couple questions. Gina, I guess the first one is on the visibility into the second half and generally the 450 million of design when you talked about any change in the timing or magnitude of those. I just hope you could kind of walk us through in the general sense. I know visibility is probably still somewhat limited in the second half, but in the general sense, how you see those rolling out as we look into the second half of this year and then in 2026. [inaudible]

Gene Sheridan: Well, yeah, definitely. Thanks for your question, Ross. And it's worth repeating the $450 million design wins was pretty extraordinary. Last year, our focus this year is on converting those from wins to production orders, as a reminder, that's lifetime revenue, so it can span from one year on mobile to maybe a few years on the high-power markets.

Gene Sheridan: and that revenue kicks in over three years, either late this year, most a good percentage to late this year.

of the vast majority in 2017.

and a little bit of them in twenty-seven. [inaudible]

Gene Sheridan: So it does depend on the start time and the ramp time of them all, but we have a good outlook to converting those design winds into purchase orders, which is why we feel, despite some headwinds in the overall semiconductor downturn...

Todd Glickman: A little bit of unknowns here with tariffs as Todd described. We feel good about driving solid growth late in the year and setting up a really strong 2026. Larger because of those designments which we expect will actually accelerate with some of the technology announcements we made in

Speaker Change: Let me guess one for Todd on the profitability side of things. Anything change as far as how long you're planning to stick it, kind of the 15 and a half million on the op-x side and the goal to reach

Speaker Change: Evedop, Breakeven, sometimes I guess the timing might be a little bit different but the revenues are kind of going to be in the mid to upper 30s per quarter. Is that still the bogey and anything has changed on that front?

Speaker Change: Yeah, nothing really to change there. We're still tracking to that target of 15.5 on op-x and expect to stay at those levels. And then as we mentioned the prior call, we're still tracking to that break even in the high 30s, which we expect to happen in 2026.

Got it. Thanks guys.

Thank you, Ross.

Speaker Change: Our next question comes from the line of Jack Egan with Charter Equity Research. Your line is open

Jack Egan: both silicon carbide and organ. I was just curious, how do your total design ones and pipeline break down between the two materials? I mean, is it similar to how your actual revenue is today, where it's predominantly GAN, or is it a bit more balanced?

Jack Egan: Yeah, a great question, Jack, and that's a really important point because EV, specifically on-board chargers

Speaker Change: are really ideal for accommodation of silicon garbage at the first stage, again in the second stage, almost identical situation for AI.

Speaker Change: Data Centers, Ideal, in fact the 12 kill a lot, the 8.5 kill a lot, almost all of our designs are using soot and carbide in the first stage for PFC gallium nitrate where you want to go kind of screaming fast and high efficiency in that second stage.

and then we're really growing. We're growing.

Speaker Change: Nicely self-carried into more commercial EV, higher power industrial, I really highlighted the high reliability, high voltage.

Speaker Change: and High Power Capability of our Southern Carbide that's winning in its own right and certain high power markets, just like Gann is doing really well in the low power markets like.

Appliance and the mobile, of course, as our traditional strength.

Speaker Change: So when you apply that back to the pipeline and it was 2.4 billion

Speaker Change: Last year, $450 million design wins, Lifetime wins, while we don't break it out.

Speaker Change: by Ganesick. It's a very well-balanced between the two. It's got a very, of course, by segment.

Speaker Change: but it's quite well-balanced and not at all indicative of the near-term revenue split where we've seen that silicon carbide drop because of the industry slowdown and pockets of channel inventory while Gannett's kind of at all-time highs. So we see them much more balanced going forward based on that pipeline.

Okay, that makes sense.

Speaker Change: and then, you know, I noticed that R&D declined quite a bit, where SGNA was actually up, or MGA was up a bit in the quarter. I mean, could you just discuss that a bit? Is that going to limit your ability to, you know, invest in next-generation tech at all?

Speaker Change: You know, Q1 was, I think, if you look at Q1 in a nutshell, Guy.

Speaker Change: SGNA is a little bit higher as we have one time expenses related to sort of the cost reductions and

Speaker Change: and Audit Fees. So that's not our typical spend there. I think as you look forward in the 2025 compared to 24, you're going to see that split being around 55% R&D versus 45% S-GNA.

Speaker Change: So there shouldn't be a change in our split. We're just bringing the levels down, proportionally from where we were before.

John Tanmontang: Next question comes from the line of John Tanwanteng with CJS Securities. Your line is open.

John Tanmontang: Hi, good afternoon. Thank you for taking my questions. I was wondering if you could give us a little bit more specific details on your exposure to China, maybe the ASP per unit you're selling into China, and if the terror situation has been enough to cause customers to maybe dial back their plans or pause them or maybe even try to, I don't know, second source or design you out of prior design ones.

Speaker Change: Yeah, thanks, Sean. Well, first, as Todd described on the GAN, we don't see much risk or impact Taiwan manufacturing. Isn't a target or impacted by China tariffs or US exposure there is pretty.

Speaker Change: Small, even if there was an eventual Taiwan tear up to kick in. So I think the conversation is mainly around Southern Carbide.

Speaker Change: as Todd described. Someone probably today is a minority of our total revenue.

Speaker Change: But a majority of that minority, if you will, is selling garbage shipping into China. So that's where the rest could be. Actually the country of origin today defined by China tariffs is based on the packaging location.

Speaker Change: We have a very strong China for China strategy that I think serves us really well in these geopolitically complicated times.

Most of our packaging isn't China [inaudible]

Speaker Change: So as it's literally defined today, we shouldn't be exposed to tariffs and we're not having an immediate impact to tariffs [inaudible]

Speaker Change: There is speculation though that if that country of origin should change to fab location.

that could have an impact as our fabrication is.

Speaker Change: because you ask. So that's a little speculative and that's what we emphasize. It's dynamic. We're keeping an eye on it. Maybe it could have an adverse impact.

Later in the year.

Well, that's really what we're trying to judge.

Speaker Change: The flip side of that is actually a really good strength. We have U.S. country-origin manufacturing.

Speaker Change: In the United States, that's a strategic region. We see a lot of growth in the future. And there, now we'll be avoiding tariffs. We see that as a really positive for U.S. customers.

Speaker Change: Got it. Thanks, Jean. And maybe just to expand on the subject a little bit more and looking forward, let's say the terror stay in place where they stay, you know, fairly high. Is there any plans out in the horizon to maybe expand your foundry base to, you know, to all the places you can produce SIC outside of the U.S. or, again, inside?

Speaker Change: Yes, that's exactly right. Nothing to form an ounce, but we have things well underway that could move us into different territories. Should that kind of worst case scenario happen that would work around those trying to tear us over time.

Okay, great. Thank you. Thanks, John .

Speaker Change: Our next question comes from the line of medicine, de-powler, with Rosenblatt-33.

Peace. Your line is open.

Speaker Change: Hi guys, could you guys just provide some more color on the traction that you're seeing in the data center vertical?

Oh yeah, definitely, Maddie, thanks for there.

Speaker Change: Question. We've come a long way from 2.7 kilowatts to 3.2, 4.5. Most recently, 8.5, and now today for the first time announcing 12 kilowatts, the details of which will be fully rolled out at Compute Excellence later this month. So that's a lot of progress.

on the one hand.

Speaker Change: We've been pleased that a lot of customers have adopted Gann or Silicon Carbide, even when they didn't really have to for performance reasons, I think even at the lower power levels you don't.

have to have GaN or sodium carbide.

Speaker Change: Some have tried it out because they know that's the future, and they better get on with learning the design.

and maturing the design proving it out. [inaudible]

Speaker Change: in their production. A lot of black well has gone to production with four to five kilowatt designs. Many of those can be done with silicon today. Again, you don't have to have...

Speaker Change: Alan Meagher, and Sullen Carbett. So, I think that's probably slowed down what we hope to be a bigger

Ramp the Shear

Speaker Change: On the other hand, once you get to E.5, I think that's a real turning point, very, very difficult to design the E.5 kilowatt.

with the density...

Speaker Change: with the efficiencies that are required without going to GAN and so on, Carvedd, and I would venture to say impossible to deliver the 12th kilowatt that we just announced without GAN and so on, Carvedd, technologies and even uniquely ours, arguably.

Speaker Change: So I think that gives you some color. I also mentioned the other way to look at this is rack power, not just the power supply itself.

Speaker Change: Each one of these power supplies I'm talking about. You can put six across the shelf or tray, and then you get a multiple shelves assigned to power. The rest of the rack or the rest of the shelves would go towards the processing.

Speaker Change: But if you listen to Nvidia and anybody else aware of this is headed, we're very quickly going to 250 to 400 to 500 kilowatts and then maybe headed towards a megawatt over the next few years

Speaker Change: Those are pretty crazy numbers, and it's hard to imagine achieving those without going to at least 8.5, and now I think, frankly, 12 kilowatt, which, as I said, gets you really close to that half a megawatt.

Speaker Change: So I think that sets us up really well for any new black well or black well altered designs and of course really well positioned for Rubin which would come late next year.

Speaker Change: Okay, great. Thanks for taking my question. Yeah, thank you, Madam.

Speaker Change: And again if you would like to ask a question, press star then the number one on your telephone

Speaker Change: We'll figure out next question comes from the line of Richard Shannon with Craig Helen Capital Group

Your line is open.

Richard Shannon: Great, thanks Gene and Todd for taking my questions. I guess I'll have to first one on Solar.

Speaker Change: kind of a multi-parter here. I'm going to give some better sense in when you're expecting to see this ramp at some point later this year.

Speaker Change: And as I recall, at least in the past when we've talked about this, this has been a design to expect to be multi-source, where you can discuss where your position there is, then lastly, are you seeing any other micro-inverter customers moving towards scan and possibly using Navitas?

Speaker Change: Solar, microinverters, in particular, as you pointed out, ramping the second half of the year, again going into the E.D.

Speaker Change: really next year. So we've got quite a sequence of events and opening up new mainstream markets.

Speaker Change: And not only is microinverters adopting GAN, it's adopting GAN bidirectional switches, which is, as I highlighted, really the most ideal switch

Speaker Change: Delivering those currents and blocking those voltages inherently in both directions, but does it with super high frequency and high efficiency of GAN? That's pretty exciting stuff and makes a ton of sense for microinverters, so yes, those are still on track.

for the second half.

Speaker Change: We are seeing Q3 ramp a little lower than expected, more of that revenue starts in Q4 and the really big numbers are next year.

Speaker Change: I think we feel good. It will be multi-sourced as you point it out.

Speaker Change: Though his final commercial negotiations are not done, they'll be done over the next.

Speaker Change: Quarter, but I think we feel good about our position being the first GAN bidirectional switch actually production released in Q1. As I highlighted, that's another major first. We've got a really important advantage in our proprietary substrate clamp, which makes the part really reliable.

and really real bust.

Speaker Change: So I think all that positions us well to take a good share and ramp that up as expected late in the year.

Speaker Change: and, again, pretty big numbers. Next year, we already have other microinverter companies that have approached us in the last six months, starting new designs. I don't think any of them will get to production this year, but expect to see other solar microinverter guys.

Speaker Change: starting next year. And to the broader message, GAN, BDS, again, we'll go into EV on-board chargers and other energy storage systems. And I think we'll see some of those going into production next year as well.

[inaudible]

Speaker Change: Okay, thanks for that gene. My follow-on question here is just kind of getting a top-down understanding here of dollar growth as a goal over the next year or your plus. What kind of you pick your time frame in 2020?

Speaker Change: 26. There's some of these applications developed, but if we look at EV's solar industrial, and I'm probably forgetting the other data center, like, is there ones that have a more disproportionate contribution to the dollar growth from the starting point of second quarter?

Speaker Change: Yeah, it's a good question. Certainly, if you look at the pipeline, you look at the design winds. I know we didn't break it down in incredible detail, but it's really well distributed. I mean, solid.

Wins, we get the total $450 million of lifetime.

Wins last year.

Speaker Change: That was pretty solidly distributed. We had 40 wins in data center. That's now up to 75 and total, as I mentioned in the call, with 40 wins in ED Emobility.

Speaker Change: We had 28 in appliance industrial. We actually had 100 in solar and energy storage, the biggest being that GAN BDS for solar. Microinverters and another 180 which has a long tail in the

Speaker Change: Consumer. So they all have different dollar values, of course, but it points to the diversity. So it's really hard to pick one. Clearly we put a strategic focus on mobile.

Speaker Change: EV and AI data centers. So I think those are the three that are going to be the biggest drivers, but you've got to give a lot of credit to that. So we're microinverter, which is going to be material. That's kind of the fourth driver for...

Speaker Change: Next year. So hard to pick one to be far above the other. Certainly we expect the new markets to be growing even faster than mobile, which is why we expect greater market diversification next year. And comments are at regional diversification as we continue to grow outside China faster than some of these other.

Speaker Change: with some of these other regions. So, if that gives you a little color, recognizing of course we're not predicting next year's revenue or how that would break up by then.

Speaker Change: Architecture Technology. Just want to get in general since, and that's very helpful, Gene, that's all for me. Thank you.

Thank you.

Jack Egan: Next question comes from the line of Jack Egan with Charter Equity Research. Your line is open.

Jack Egan: Thanks for taking the follow-up. I was hoping you could update us at the market offering that was announced at the end of the March quarter. You know, your cash firm was about the same...

Jack Egan: Rate as it was last quarter. So, did you actually execute the offering or was it just to have it on hand in case you need it? And then will it be for anything in particular or is it just to give Navitas more run line?

Jack Egan: Yeah, that's a great question, correct. So we have the offering out there. We have not XQed upon it. It's there in case we want to use it for strategic reasons. If we need some extra strategic capital, as you notice, right, our cash usage in Q1 was only $11 million.

Jack Egan: and we have 75 million on our balance sheet, so that provides us quite a runway going forward, seven plus quarters if we maintain this level, but as we expect revenue to grow in the second half towards the end of the year, we expect our cash usage to go down, so right now we are just having an ATM out there for strategic purposes.

Jack Egan: Okay, great, that's helpful. And then I guess I'll just get a quick second one here. With bidirectional GANS, which is ramping this year, Gene, could you just give us a general sense of the total revenue potential for next year for bidirectional GANS?

Thank you.

Yeah, um...

Speaker Change: Yeah, again, we're not guiding, but certainly revenue potential. I would certainly put it north of 10 million. I think that's a conservative view.

Speaker Change: across the different applications and things. It's pretty dynamic, obviously it's new. We've got over a dozen new opportunities. Many dozens have been sampled, so it's definitely growing by the day. I would put it certainly north of double digit millions for next year.

Okay, great. Thanks, Gene.

Thanks, Chair.

Speaker Change: Our next question comes from the line of Joe Moore with Morgan Stanley . Your line is open.

Speaker Change: Great, thank you. I'm going back to the AI data center. I mean, I guess I just wanted to understand the timing. It seems like

Speaker Change: You know, when you sort of say black well designs from here could use your technology, you know, I would think a lot of the black well current generation designs are done already just just give us a sense for like how that can layer in and how much of this is kind of more of a urban play.

Speaker Change: Yeah, it definitely shows. So, we're seeing a lot of different configurations, a lot of...

Speaker Change: on going new Blackwell designs. Obviously people have not moved on to Blackwell Ultra and Rubens sometime next year. So we still see a lot of opportunity to intersect into Blackwell. Case in point, we had 40 wins last year. It's now up to 75, including things that are already starting to ramp. Not a minimally here in the first half, including that 40.

Speaker Change: Winds from last year, and we see a lot of different configurations. It's still pretty dynamic. How many black walls are you going to put in the rack? How much do you want to upgrade that rack from 50 kilowatts to 100 or 100 to 150?

Speaker Change: And how much do you want to move away from traditional power supply designs that use silicon that might be three, four, five kilowatts?

Speaker Change: to where you're pushing at 8.5 or now at 12 kilowatts, which are inevitably going to use Egan and Sultan carbide. So, I think it's quite dynamic. We still see a lot of opportunities for intersection with Blackwell. I think it'll grow from there to Ultra, and then I'm sure we'll see even better opportunities with Ruben.

Speaker Change: Great, thank you. And then just going back to the balance sheet of question you were just asked in terms of, you know, there's a scenario where revenue picks up quite a bit and you're fine. I guess if we sort of remain in kind of a tariff, malaise, things like that, just can you talk about contingency plans and, you know, the ability to improve the cash burn under different revenue scenarios?

Speaker Change: Yeah, so right now we're keeping our cash pretty tight on the working capital elements there.

Speaker Change: because of that and because of the reduction in AWPX, we're able to keep that cache really much smaller going forward and we expect that to happen.

Speaker Change: in a sort of slower growth element as well as an accelerate growth in Q4. So we really don't see any concerns there today given our cash levels and our ability to sort of keep our working capital in check.

Thank you.

Big Show.

Speaker Change: We have a follow-up question from Ross Seymore with Deutsche Bank, Kierlein is open.

Ross Samer: Hi guys, let me thanks for asking a follow up. Just wanted to talk about the inventory burn in the general market. We've heard some green shoots from some of the industrial and markets. Just gene what's your view on the level of inventory in the channel for you? Are you seeing that starting to normalize so you could get growth more the cyclical side of the equation than the company specific design wins? [inaudible]

Ross Samer: Yeah, yeah, definitely. Ross, yeah, certainly it was more broad-sped spread last year, and this is mainly a soaking carbide.

Ross Samer: Phenomena, the three markets slowed down, simultaneous with a lot of capacity coming on.

and it happened relatively quickly, creating a decent amount of...

White Spread, Solincarbed Inventory, and the channels throughout the globe.

and now we've talked about really specific...

Pockets of...

Ross Samer: So in private inventory, it's definitely declined. We're seeing good sell through a healthy channel inventory in many parts of the world, but we're still not there yet. We're not in the healthy.

Ross Samer: Place. So we think it's a quarter or two away, where I think this remaining overhang is behind us and just adds to our bullishness for resuming growth, not only on Southern Carbide, but of course, continuing growth again later in the year.

Got it. Thank you.

Thanks for us.

Speaker Change: And our last question comes from the line of Queen Bolton with Needham. Your line is open.

Nick Doyle: This is Nick Doyle on For Quinn, thanks for taking my question.

Speaker Change: I just wanted to know how your customers are looking at the smartphone market in terms of the unit growth in 2025 and how does that compare to your own?

Nick Doyle: Mobile Outlook, and really, how do you see any signs of, you know, pulling or push out related to Terrace? Thanks.

Nick Doyle: Yeah, thanks, <expletive> . Yeah, thanks for bringing it up. We obviously didn't put a spotlight on mobile. It continues to be an important stable and growing part of our.

Business Last Year. [inaudible]

Nick Doyle: We estimated the adoption rate around 10% globally. A particular note, Xiaomi and OPPO jumped up quite a bit. I think they doubled their GAN adoption to around 30% of all of their phones, being with GAN as they're pushing the power levels to 65 watts and higher faster than the rest of the regions and suppliers.

We think that same trend continues?

Nick Doyle: to suppliers around the world. We don't see huge jumps up.

Nick Doyle: this year, but we would have reflected that in our outlook, but mobile's pretty dynamic, so I think the end market to your question, the end market's not.

Nick Doyle: growing a ton and it doesn't need to, you know, more than smartphones growing 2% or 5%

We want to know.

Nick Doyle: When are they going to double their gang line-up to go from 10% to 20% or 20% to 30% And this is inevitably going to happen, at least for all chargers, we believe 30 watts and higher, especially where we're in a very strong leadership position at 65 watts.

Nick Doyle: and Hire. So it's dynamic. I think the trends are strong. If we can confirm big jump-ups later in the year, that would only add to our bullish outlook for resuming more solid growth later in the year.

Speaker Change: Thanks. As a follow-up, you talked about a channel flowdown in an EV industrial and ESS. Is that more demand-related or are we're still seeing pocket of inventory like you kind of talked about earlier? Thanks.

Speaker Change: Yeah, Nick, I think it was a combination of both and the typical Semiconductor stuff. I mean, we're in a classic Semiconductor

Down turn, so in carbide, like a lot of things were...

Growing like crazy, they're in short supply.

Speaker Change: Once all of a sudden, the capacity kicks up, the demand slows down. It's kind of a double whammy and it's hard for the entire industry to adjust quickly.

and you get these inventory overhangs or a channel.

Speaker Change: Inventory accesses, and then the whole industry's got to work on.

Speaker Change: working through those. And I think we're near the end, as I said earlier.

Speaker Change: a quarter or two to go, and hopefully that's completely behind us.

Thank you.

Speaker Change: Ladies and gentlemen, that concludes the question and answer session. Thank you all for joining and you may now disconnect.

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