Navitas Semiconductor Q2 Earnings: Revenue Meets Guidance, Strategic Shifts Amid Industry Challenges

Navitas Semiconductor Corp reported Q2 revenues of $14.5 million, in line with guidance, and a gross margin of 38.5%. The company raised $97 million in new capital and partnered with Nvidia for next-generation data centers. However, the industry downturn and removal of tax credits pose challenges, with Q3 revenue guidance at $10 million.

Navitas Semiconductor Corp reported Q2 2025 revenues of $14.5 million, in line with guidance, and a gross margin of 38.5% [1]. The company raised $97 million in new capital and partnered with Nvidia for next-generation data centers. However, the industry downturn and removal of tax credits pose challenges, with Q3 revenue guidance at $10 million.

The company's shift to AI data centers, leveraging its expertise in gallium nitride (GaN) and silicon carbide (SiC) technologies, is a strategic move to capitalize on rising power demands. Navitas expects significant growth and market opportunities in this sector. The company reported that its gross margin remained stable at 38.5%, primarily due to favorable product mix and operational efficiencies, although tariff pressures are impacting SiC margins.

Navitas reduced operating expenses to $16.1 million in Q2, a $1.1 million reduction from Q1, through team consolidation and process streamlining. This resulted in a $10.6 million improvement in operational losses.

The company's strategic focus on AI data centers and energy infrastructure markets is expected to take multiple quarters to fully materialize. Navitas is well-positioned with the resources and runway to execute on these opportunities for its next wave of growth.

Navitas is also facing industry-wide semiconductor downturns, tariff conflicts, and the removal of solar and EV tax credits. The company took a $3 million inventory reserve on China SiC products due to tariff instability.

The company's Q3 2025 revenue guidance of $10 million reflects adverse impacts from China tariff risks for its silicon carbide business and its strategic decision to de-prioritize lower-margin China mobile business while accelerating investment in AI data centers and associated new energy infrastructure. Gross margin for Q3 is expected to be flat at 38.5% plus or minus 50 basis points, with operating expenses anticipated at $15.5 million.

Navitas is confident in its long-term market leadership and gross margin expansion, but acknowledges near-term financial softness and transition challenges. The company is leveraging partnerships, new capital, and manufacturing efficiencies to position itself for substantial growth as AI data center opportunities ramp in late 2026.

References:
[1] https://www.ainvest.com/news/navitas-semiconductor-q2-2025-navigating-contradictions-market-focus-margins-demand-2508/
[2] https://seekingalpha.com/news/4478051-navitas-outlines-2_6b-ai-data-center-opportunity-as-it-sharpens-strategic-focus-and