China proved to be a sore spot for Navitas, but the company sounded upbeat about its refocused efforts on high-revenue, high-margin businesses.
- Navitas reported a third-quarter adjusted loss per share of $0.05, in line with the consensus estimate; revenue also met expectations.
- China tariffs and pricing pressure in the mobile end market dented revenue.
- Navitas’s stock has jumped by more than 240% this year, thanks to a strong rally in mid-October following its partnership with Nvidia.
Navitas Semiconductor Corp. (NVTS), a manufacturer of gallium nitride and silicon carbide power semiconductors, issued below-consensus guidance, sending its stock sharply lower in Monday’s after-hours session. Retail investors reacted cautiously to the report.
After settling Monday’s session down nearly 9% at $12.25, Navitas stock fell over 14% in the extended session.
Navitas Q3 Earnings Snapshot
The company reported a third-quarter adjusted loss per share of $0.05, aligning with the consensus estimate and narrower than the year-ago loss of $0.06. Revenue plunged over 53% year over year (YoY) to $10.1 million but edged past the $10 million consensus estimate.
CFO Todd Glickman said on the earnings call that the revenue reduction reflected “adverse impacts from the China tariff risk for our silicon carbide business and pricing pressure in our mobile business, particularly in China,” according to a transcript provided by Koyfin.
Torrance, California-based Navitas makes advanced computer chips that help electronics use power more efficiently.
Navitas Q4 Outlook
The semiconductor company expects fourth-quarter revenue in the range of $7 million, plus or minus $0.25 million, trailing the mean analysts’ estimate of $10.03 million. It attributed the subpar outlook to its strategic decision to deprioritize the low-power, lower-profit China mobile & consumer business, as well as streamline its distribution network and reduce channel inventory, to pivot to higher-power revenue and customers.
CEO Chris Allexandre, however, sounded optimistic. “I’m excited to be leading the Navitas 2.0 team at this pivotal moment, as demand accelerates across high-power semiconductor markets for AI data centers, performance computing, energy and grid infrastructure, and industrial electrification.” The company guided adjusted gross margin to 38.5%, plus or minus 50 basis points.
What Retail Feels About Navitas’ Q3
On Stocktwits, retail sentiment toward Navitas stock shifted to ‘neutral’ by late Monday, down from ‘bearish’ the day before. The message volume also increased slightly to ‘normal’ levels, with the retail chatter over the 24 hours leading up to late Monday rising by nearly 2,060%.
Shrugging off the stock plunge, a bullish watcher said they would buy 3,000 shares later. Another user said the earnings weren’t bad, adding that they started a position.
Some, however, remained skeptical of the company’s artificial intelligence (AI) opportunity. “AI is going to solve its own energy problem well before this company gets anything to market.”
Navitas’s stock has jumped by more than 240% this year, thanks to a strong rally in mid-October following its partnership with Nvidia.
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