Navitas Semiconductor NVTS reported fourth-quarter 2024 non-GAAP loss of 6 cents per share. The figure was in line with the Zacks Consensus Estimate. The loss was wider than the year-ago quarter’s loss of 4 cents.

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Navitas’ earnings met the Zacks Consensus Estimate in two of the trailing four quarters, beat once and missed once, with an average negative surprise of 7.50%.

Net revenues of $18 million missed the Zacks Consensus Estimate by 6.03% and declined 31% year over year due to broad industry headwinds and a slowdown in key semiconductor markets. The broader market deceleration weakened demand, leading to lower sales performance.

Following the results of the unimpressive top and bottom-line performance, NVTS’ shares fell 14.21% in after-hours trading yesterday.

NVTS’ Operating Results

In the fourth quarter of 2024, the non-GAAP gross margin contracted 190 basis points year over year to 40.2%.

Non-GAAP Research and development (R&D) expenses increased 4.1% year over year to $11.9 million. As a percentage of revenues, R&D expenses were 66.1% compared with 43.8% in the year-ago quarter.

The non-GAAP selling, general and administrative (SG&A) expenses decreased 14% year over year to $8 million. As a percentage of revenues, SG&A expenses were 44.5% compared with 35.7% in the year-ago quarter.

Non-GAAP operating expenses were $19.9 million, down 4% year over year, with sequential and annual declines indicating effective expense management initiatives.

The company reported a non-GAAP operating loss of $12.7 million, indicating a 30% decline year over year. Operating margin contracted 33% on a year-over-year basis.

Navitas’ Q4 Key Business Highlights

Navitas achieved record revenues in gallium nitride (GaN) products across the mobile, consumer and appliance sectors, while its silicon carbide (SiC) business faced challenges due to a slowdown in the solar, industrial and electric vehicle (EV) markets.

The company secured $450 million in customer design wins, driven by strong growth in the data center and EV sectors. This momentum strengthens confidence in achieving healthier growth rate by late 2025 and sustaining long-term expansion ahead of the overall power semiconductor market.

The customer pipeline expanded 92% year over year, growing to $2.4 billion in December 2024 from $1.25 billion in December 2023.

Navitas achieved the highest growth in revenues and design wins within the data center sector, securing 40 customer project wins throughout the year. These successes came from leading ODMs in Asia, supplying major Tier 1 data center players such as Google, Amazon, Facebook, Alibaba, Dell and HP.

In the mobile sector, Navitas has achieved widespread adoption of GaN chargers, achieving more than 180 design wins. This includes the first significant wins with Transient, which is now a top-five global smartphone brand and the market leader in regions such as the Middle East, Africa, and Central and South America.

NVTS’ Balance Sheet Details

As of Dec. 31, 2024, cash and cash equivalents were $86.7 million compared with $98.6 million as of Sept. 30, 2024.

The company continues to operate with no debt, maintaining financial flexibility for growth initiatives.

Navitas Provides Q1 Guidance

For the first quarter of 2025, Navitas Semiconductor anticipates net revenues of $13-$15 million.

The company expects a non-GAAP gross margin for the first quarter of 38%, plus or minus 50 basis points.

Non-GAAP operating expenses are estimated to be $18 million for the first quarter of 2025.

NVTS’ Zacks Rank & Stocks to Consider

Navitas currently carries a Zacks Rank #3 (Hold).

Okta OKTA, DoubleVerify DV and Zscaler ZS are some better-ranked stocks in the broader sector.

Okta flaunts a Zacks Rank #1 (Strong Buy) at present, and DoubleVerify and Zscaler each carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Okta’s shares have risen 15.8% year to date. OKTA is set to report fourth-quarter fiscal 2025 results on March 03.

DoubleVerify’s shares have gained 16.2% year to date. DV is set to report fourth-quarter 2024 results on Feb. 27.

Zscaler’s shares have returned 9.3% year to date. ZS is set to report second-quarter fiscal 2025 results on March 05.

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