Navitas Semiconductor (NASDAQ: NVTS) shares fell about 10% in premarket trading on Tuesday after investors focused on the company's large GAAP net loss, despite second-quarter revenue topping Wall Street expectations.
The power semiconductor company reported an adjusted loss of $0.04 per share for the second quarter, matching analyst estimates.
Revenue rose sequentially to $10.53 million from $8.6 million in the first quarter, exceeding consensus expectations of approximately $9.84 million to $10 million.
On a GAAP basis, Navitas posted a net loss of $228.2 million, or $0.95 per share, compared with a net loss of $33.8 million in the prior quarter.
The company said the result included a non-cash charge of $203.1 million related to the final remeasurement of earnout liabilities. Excluding certain items, non-GAAP net loss was $9.3 million.
Navitas CEO Chris Allexandre wrote that the quarter's performance reflected the company's transition toward higher-power markets, highlighting growing demand tied to artificial intelligence infrastructure.
“With the rapid adoption of AI, we are seeing accelerated market demand to overcome critical power bottlenecks in AI infrastructure, both within AI data centers as well as the requisite grid and energy infrastructure needed to power them,” Allexandre said.
“By the end of the year, Navitas will complete its transition with revenue from mobile and low-end consumer being insignificant and nearly all sales coming from high-power markets.”
The company said high-power markets grew more than 50% year over year and expects AI infrastructure, including AI data centers and grid and energy infrastructure, to account for more than one-third of total sales by the end of 2026.
For the third quarter, Navitas forecast revenue of $13.5 million, plus or minus $0.5 million, implying approximately 28% sequential growth at the midpoint and a return to year-over-year revenue growth. The company also projected non-GAAP gross margin of about 39.7%, plus or minus 100 basis points.
Jefferies wrote that the results showed the company's "Navitas 2.0" transformation is running roughly a quarter ahead of schedule, citing stronger-than-expected second quarter revenue, expanding margins and guidance for a return to year-over-year growth in the third quarter.
The firm noted that near-term growth is being driven by silicon carbide products used in AC/DC power supplies, which it said reduces dependence on the timing of the industry's transition to 800-volt architectures.
The analysts added that while the company's dual gallium nitride and silicon carbide portfolio positions it across multiple AI infrastructure applications, the larger opportunity from 800-volt gallium nitride designs remains a late-2027 to 2028 story, with market share gains in a competitive field still a key question.