Navitas Semiconductor (NVTS) Q3 2026 earnings review
Navitas sales grow again, but the Claros deal lifts costs
Navitas Semiconductor, a maker of power-management chips, returned to yearly revenue growth after dropping its phone-charger business, while its purchase of Claros lifted planned spending. Third-quarter sales rose 38% from a year ago to $14 million as chief executive Chris Allexandre shifted the company toward artificial intelligence data centers and the electric grid. Management forecast $16 million in fourth-quarter sales, which lifts full-year growth to 7%, but operating expenses excluding one-offs will jump to $25 million.
| Revenue | $14.0M +38% from a year ago, +33% from last quarter |
|---|---|
| Gross margin, excluding one-offs | 40.0% up 1.3 percentage points from a year ago |
| Q4 revenue outlook | $15.5–16.5M lifts full-year growth forecast to 7% |
| Q4 operating expenses, excluding one-offs | $24.0–26.0M up 51% from $16.5M in Q3 after buying Claros |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because higher fourth-quarter sales come with a much larger cost base that pushes break-even further away. Raising the year-end AI infrastructure target above 40% of sales and shipping the first US-made chips from GlobalFoundries strengthen the product story. The bad news: folding in Claros lifts quarterly operating expenses by 51% by our math, widening the implied fourth-quarter operating loss excluding one-offs to $18.5 million.
The question now is whether AI data center and grid orders will grow fast enough in 2027 to cover a quarterly cost base that now needs over $60 million in sales to break even. One view is that tripling AI revenue next year will quickly close the gap; the other is that the largest data center chip orders will not arrive until late 2027, leaving heavy cash burn in the meantime. Management's 2027 outlook and any exact backlog disclosure on the fourth-quarter call will tell.
🐂 Bull Case
AI and Grid Chips Replaced Phone Chargers
Navitas makes gallium nitride (GaN) and silicon carbide (SiC) power chips that manage electricity with less heat than standard silicon. Over the past year, chief executive Chris Allexandre walked away from low-margin phone chargers in China to focus on artificial intelligence data centers and the electric grid. "By year-end, we expect mobile and low-end consumer revenue to be essentially eliminated from our mix," Allexandre said.
The new markets grew fast enough in the third quarter to lift total revenue above last year's level for the first time since 2024. Finance chief Tonya Stevens said sales to high-power markets grew more than 50% from the second quarter. Management also raised its year-end target for AI infrastructure — data centers plus grid equipment — to more than 40% of total sales, up from its prior goal of over one third.
- Third-quarter revenue: $14.0 million, up 33% from last quarter and 38% from a year ago
- High-power full-year revenue forecast: up 125% from 2025
- Total full-year revenue forecast: up about 7% to $49.1 million, raised from ~5%
- Two-year comparison: third-quarter revenue is still down 35% from $21.7 million in the third quarter of 2024 by our math
This matters because the company has finished shrinking its old business. Still, the 38% growth rate compares against a quarter last year when management had already cut phone-charger shipments, so total sales remain well below their 2024 peak.
What to watch: fourth-quarter revenue against the $15.5 million to $16.5 million plan. Hitting that target will confirm that AI data center and grid shipments can carry the entire business now that phone-charger sales are near zero.
US Factory Shipments and Government Deal Back the Portfolio
To win data center and energy grid contracts, the chipmaker needs manufacturing outside Taiwan and products that handle higher voltages. Last quarter, management promised to announce a 10-kilovolt silicon carbide development deal and to start sampling chips from its US foundry partner GlobalFoundries before year-end.
Navitas delivered on both promises this quarter. The US government selected the company for the ALATTIS program to develop 10-kilovolt silicon carbide chips for the electric grid. The company also recorded "Initial deliveries of U.S.-produced Gen-5 GaNFast devices from GlobalFoundries to Navitas", and designed a new 800-volt-to-12-volt power board with Nvidia alongside an 800-volt data center design with Microchip.
What to watch: customer qualification of the 8-inch GlobalFoundries chips in early 2027, plus the release of the 6.5-kilovolt silicon carbide platform that management had planned for the third quarter. On-time qualification would keep US supply ready before data center demand steps up in mid-2027.
🐻 Bear Case
The Claros Purchase Pushes Profit Further Away
On October 6, the Torrance, California group closed its purchase of Claros, which makes integrated voltage regulators (IVR) — tiny power converters placed right next to an AI processor. "The recent acquisition of Claros completes our strategic portfolio for powering AI infrastructure from grid-to-xPU," Allexandre said, while the investor presentation claimed a clear path to profitability.
In the third quarter, research and development excluding one-offs fell 7.7 percentage points of revenue from a year ago, and selling and administrative costs fell 26.9 points, trimming the operating loss slightly to $10.9 million. For the fourth quarter, however, management forecast $25.0 million in operating expenses excluding one-offs, up 51% from the third quarter, "which includes the operational expenses associated with the acquired Claros business".
That cost jump cuts directly against the profitability claim. By our math, at the middle of the fourth-quarter plan, the operating loss excluding one-offs will widen from $10.9 million to $18.5 million. For two years management said the company would break even when quarterly revenue reached the high-$30 millions; with $25 million of quarterly expenses and a 40.5% gross margin, breakeven now requires nearly $62 million of quarterly revenue by our math,almost four times the fourth-quarter forecast.
What to watch: first-quarter 2027 operating expenses and any revenue contribution from Claros. A second quarter near $25 million in expenses without immediate Claros revenue would mean the deal added heavy fixed costs years before IVR chips sell in volume.
Management Still Hides the Exact AI and Order Numbers
Navitas asks investors to judge its turnaround on future AI data center demand. Stevens pointed to "a strong book-to-bill ratio well above one and backlog that extends into mid-2027", meaning new orders exceeded shipments, and the presentation projected that AI infrastructure revenue will triple in 2027.
Yet for another quarter, the company gave no dollar figures for its backlog, its order-to-shipment ratio, or its actual third-quarter AI sales. In early 2025, Navitas stopped publishing its lifetime design-win and pipeline dollar totals. Even the new forecast that AI infrastructure will exceed 40% of fourth-quarter revenue points to only about $6.4 million in quarterly sales by our math.
What to watch: whether management gives an exact 2026 AI dollar figure in the fourth-quarter report and separates 2027 contracted orders from unconfirmed projects. Without dollar figures, outsiders cannot tell how much of the 2027 growth forecast rests on firm customer orders.
Inventory Jumped and Share Count Kept Rising
To prepare for future data center orders and a factory move from TSMC to GlobalFoundries, Navitas is tying up more cash in unsold chips while issuing more stock. In the presentation, the company said it is "Strategically building inventory to support expected ramp of the second and third data center inflection points and enable fab transition".
- Total inventory: $32.4 million, up 66% from $19.5 million last quarter by our math, including $11.2 million held for beyond one year
- Average share count: 261.5 million, up 23% from a year ago and 9% from last quarter
- Stock-based compensation: $9.0 million in the third quarter, equal to 65% of revenue by our math
- New one-off charges: $3.2 million in restructuring and $7.7 million in other legal, tax and deal costs
Holding $11.2 million of long-term inventory carries write-down risk if data center designs change, and the rising share count means each share owns less of the future recovery. In addition, the $3.2 million restructuring charge came after management said in the second quarter that its restructuring plan was nearly finished.
What to watch: total share count and inventory write-downs in the annual report. Further share increases after the October Claros closing will show how much stock Navitas issued to buy the business.
Risks this quarter didn't answer
Three standing risks from the second quarter received no update in the third-quarter earnings release or presentation because the full quarterly filing is not yet available.
- Patent and trade-secret lawsuits: Wolfspeed sued over core GaN and SiC patents in July, and Renesas sued over trade secrets; the quarterly filing's legal footnote will show any status change or settlement costs.
- Customer and regional concentration: one distributor accounted for 71% of second-quarter sales and Hong Kong accounted for 76%; the quarterly filing's concentration footnote will show whether AI growth broadened the customer base.
- Related-party chip licensing: Navitas licensed its SiC technology to Magnachip, which shares a board member, for an undisclosed sum; the related-party footnote will show if the companies finalized commercial terms.
💲 Other KPIs
Jumped from 0.4% last quarter and minus 2.0% a year ago. The improvement happened because some older acquired technology finished its accounting write-off schedule during the quarter, cutting intangible amortization in cost of sales from $4.0 million to $2.5 million, alongside higher revenue.
Dipped by $25.9 million from $557.4 million at the end of the second quarter by our math, as the power-chip maker funded its operating losses and added $12.9 million in inventory. Cash remainsmore than double the $236.9 million held at the end of 2025 following first-half stock sales.
Uncollected customer bills rose 20% from $4.8 million last quarter by our math, growing slower than the 33% sequential increase in revenue. That gap indicates customers paid on time during the third quarter.
🔮 Guidance
Raised against what the prior full-year plan pointed to. The $16.0 million middle of the range means 14% growth from the third quarter and 119% growth from last year's $7.3 million trough, lifting the full-year growth forecast from about 5% to 7%. Navitas beat its quarterly midpoint in each of the last five quarters by an average of 3.7%; if the pattern holds, fourth-quarter sales would reach $16.6 million by our math.
Consistent with prior commentary. The 40.5% middle of the range is up 0.5 percentage points from the third quarter and up 1.8 points from a year ago, as low-margin phone charger sales drop below 5% of the total.
New. The $25.0 million middle of the range is up 51% from $16.5 million in the third quarter and up 68% from a year ago by our math, because it folds in the newly acquired Claros engineering team and operations. By our math, that expense jump pushes the implied operating loss excluding one-offs to 115.8% of revenue in the fourth quarter.
❓ Key Questions
What did Navitas pay in cash and stock for Claros?
The Claros purchase closed on October 6 and lifts fourth-quarter operating expenses by about $8.5 million, but the release does not state the purchase price, cash spent, or shares issued.
What are the exact dollar figures for AI sales and backlog?
Management says AI infrastructure will top 40% of fourth-quarter sales, orders exceed shipments, and AI sales will triple in 2027, but still withholds the dollar numbers behind those claims.
Why did restructuring and other one-off charges jump by $10.9 million?
Navitas booked $3.2 million in restructuring and $7.7 million in other legal, tax, and deal expenses in the third quarter, even though management said last quarter that its workforce reduction was nearly done.
Did one distributor still account for 71% of quarterly revenue?
In the second quarter, a single distributor made up 71% of sales and half of unpaid customer bills. Investors need the third-quarter filing to see if AI shipments reduced that concentration.