Navitas Semiconductor Corp: Form 10-Q for the period ended Mar 31, 2026

Unless the context otherwise requires, all references in this section to the “Company,” “we,” “us,” or “our” refer to the business of Navitas and its subsidiaries. Throughout this section, unless otherwise noted, “Navitas” refers to Navitas Semiconductor Corporation and its consolidated subsidiaries.

This quarterly report includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are attempts to predict or indicate future events or trends or similar statements that are not a reflection of historical fact. Forward-looking statements may be identified by the use of words such as “we expect” or “are expected to be,” “estimate,” “plan,” “project,” “forecast,” “intend,” “anticipate,” “believe,” “seek,” or other similar expressions. Forward-looking statements are made based on estimates and forecasts of financial and performance metrics, projections of market opportunity and market share and current indications of customer interest, all of which are based on various assumptions, whether or not identified in this press release. All such statements are based on current expectations of the management of the Company and are not predictions of actual future performance. Forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions and expectations. Many actual events and circumstances that affect performance are beyond the control of the Company, and forward-looking statements are subject to a number of uncertainties.

Our business is subject to certain risks that could materially and adversely affect our business, financial condition, results of operations, or the value of our securities. These and other risk factors are discussed in the Risk Factors section beginning on p. 13 of our annual report on Form 10-K for the year ended December 31, 2025, as updated in the Risk Factors section in this quarterly report on Form 10-Q, and in other documents we file. If any of these risks materialize or if our assumptions underlying forward-looking statements prove to be incorrect, actual results could differ materially from the results implied by these forward-looking statements.

Overview

Navitas Semiconductor Corporation designs, develops and markets next-generation power semiconductors, including gallium nitride (“GaN”) power integrated circuits (“ICs”), high-voltage silicon carbide (“SiC”) devices, associated high-speed silicon system controllers, and digital isolators used in power conversion and charging applications. We focus primarily on high-power markets, including AI data centers, energy and grid infrastructure, performance computing, and industrial electrification. Our products are designed to improve system efficiency, increase power density, enhance thermal performance, and reduce overall system size and cost compared to traditional silicon-based technologies. By leveraging the electrical properties of wide-bandgap (“WBG”) materials such as GaN and SiC, our solutions enable higher switching frequencies, higher voltage operation, and improved energy efficiency. These capabilities are increasingly important in applications such as hyperscale data centers, renewable energy systems, grid modernization infrastructure, and industrial automation.

We operate as a fabless semiconductor design company and outsource wafer fabrication, assembly, and testing to qualified third-party manufacturing partners. This business model allows us to operate with relatively low capital expenditure requirements; however, our results depend on the capacity, cost structure, yield performance, and operational execution of our manufacturing partners. We maintain operations around the world, including the United States, Philippines, China, Taiwan, and South Korea, with principal executive offices in Torrance, California.

Navitas 2.0 Restructuring Plan

We continue to execute the Navitas 2.0 Restructuring Plan, which was initiated in the fourth quarter of 2025 to reposition the Company as a focused high-power semiconductor provider serving large, durable, higher-margin markets. The plan remains centered on portfolio and organizational realignment, technology roadmap execution, go-to-market optimization, and disciplined investment in strategic end markets.

Results of Operations

The tables and discussion below present our results for the three months ended March 31, 2026 and 2025 (in thousands):

Revenue

We design, develop and manufacture GaN FETs, GaN ICs, SiC MOSFETs and modules, and Schottky diodes that deliver best-in-class performance, ruggedness, and quality. Our revenue represents the sale of semiconductors through specialized distributors to original equipment manufacturers (“OEMs”), their suppliers, and other end customers. We consider the domicile of our end customers, rather than the distributors we sell to directly, to be the basis of attributing revenues from external customers to individual countries. Revenues for the three months ended March 31, 2026 and 2025 (in thousands) were attributable to end customers in the following countries:

The decline in sales of $5.4 million or 39% was primarily due to the decrease in sales of mobile in the Asia region, primarily China, and consumer markets.

Cost of Revenues

$ in thousands

The decrease of $3.4 million or 38% was primarily driven by a decline in sales. The increase in percent of revenue was primarily due to higher stock-based compensation.

Research and Development Expense

$ in thousands

The increase of $1.9 million was primarily driven by an increase in stock-based compensation as well as research and development materials, partially offset by a decrease in headcount related cost as a result of the Company’s reductions in force.

Selling, General and Administrative Expense

$ in thousands

The decrease of $0.5 million, or 4%, was primarily driven by a reduction in sales commissions and professional fees partially offset by an increase in stock-based compensation.

Amortization of Intangible Assets

$ in thousands

Amortization of intangible assets remained flat.

Restructuring Expense

$ in thousands

The decrease of $1.0 million was primarily due to timing of restructuring related plans.

Other Income (Expense), net

$ in thousands

The decrease in other income of approximately $14.8 million is primarily due to the change in fair value of our earnout liabilities of $16.0 million partially offset by an increase in interest and dividend income.

Income Tax Provision

$ in thousands

Income tax provision was flat primarily due to our large loss from operations. We expect our tax rate to remain close to zero in the near term due to full valuation allowances against deferred tax assets.

Equity method investment loss

$ in thousands

In the first quarter of 2026, the Company discontinued the application of the equity method of accounting following the loss of significant influence.

Liquidity and Capital Resources

Our primary use of cash is to fund operating expenses, working capital requirements, research and development, and capital expenditures. In addition, we use cash for strategic investments and acquisitions.

We expect to continue to incur net operating losses and negative cash flows from operations and we expect our research and development expenses, general and administrative expenses, and capital expenditures will remain relatively flat.

We currently expect to fund our cash requirements through the use of cash and cash equivalents on hand. We believe that our current levels of cash and cash equivalents are sufficient to finance our operations, working capital requirements, and capital expenditures for the foreseeable future.

Cash Flows

The following table summarizes our consolidated cash flows for the three months ended March 31, 2026 and 2025 (in thousands):

23

We derive liquidity primarily from cash on hand and equity financing activities. The changes in our cash flows for the three months ended March 31, 2026, compared to the same period in 2025, were primarily driven by the following:

Operating Activities

Net cash used in operating activities for the three months ended March 31, 2026 was $16.4 million compared to $13.5 million for the three months ended March 31, 2025. The increase was primarily driven by a higher net loss, including unfavorable change in the fair value of the earnout liability and working capital, partially offset by higher non-cash stock-based compensation.

Investing Activities

Net cash used in investing activities increased slightly during the three months ended March 31, 2026, compared to the same period in 2025, primarily due to additional capital expenditures for R&D equipment.

Financing Activities

Net cash provided by financing activities increased $0.6 million primarily driven by higher proceeds from stock option exercises, partially offset by increased payments on finance lease obligations.

Contractual Obligations, Commitments and Contingencies

In the ordinary course of business, we enter into contractual arrangements that may require future cash payments. As of March 31, 2026, our non-cancellable contractual arrangements consisted of lease obligations and an agreement for the purchase of equipment. Refer to Note 9 - “Leases” for further information on our minimum future payments related to lease obligations.

Off-Balance Sheet Commitments and Arrangements

As of March 31, 2026, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Critical Accounting Policies and Estimates

The preparation of our financial statements and related disclosures in accordance with U.S. GAAP requires our management to make judgments, assumptions and estimates that affect the amounts reported in our accompanying condensed consolidated financial statements and the accompanying notes included elsewhere in this quarterly report. Our management bases its estimates and judgments on historical experience, current economic and industry conditions and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our condensed consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain.

There have been no material changes to our critical accounting policies and estimates from the information in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in our 2025 annual report on Form 10-K.

Market Conditions

Adverse changes in the global economy may continue to negatively impact demand for our products. This includes shifts in vendor inventory levels and altered customer ordering behaviors, such as unexpected cancellations.

Commodity Risk

We are exposed to price fluctuations for commodity raw materials used in our end products. Suppliers often pass these cost increases to us through price hikes or surcharges. While we primarily rely on purchase orders rather than long-term contracts, we actively mitigate this risk by securing firm pricing aligned with our planned production volumes.

Foreign Exchange and Interest Rate Risk

We are exposed to market risks from fluctuations in foreign currency exchange rates and interest rates, which may adversely impact our financial position. We regularly assess these risks and utilize established policies to protect against potential adverse financial effects.

Evaluation of Disclosure Controls and Procedures

Our management, with the supervision and involvement of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2026, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes from the risk factors described under Item 1A of our annual report on Form 10-K for the fiscal year ended December 31, 2025.