Navitas Semiconductor Corp (NVTS) Q2 2026 Earnings Report, Transcript and Summary

Hello, and thank you for standing by. My name is Lisa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Navitas Semiconductor Second Quarter '26 Earnings. [Operator Instructions] I would now like to turn the call over to Brett Perry of Shelton Group Investor Relations. Please go ahead.

Good afternoon, and welcome to Navitas Semiconductor Second Quarter 2026 Financial Results Conference Call. Joining us today are Navitas's President and CEO, Chris Allexandre; and CFO, Tonya Stevens. I'd like to remind listeners that management's prepared remarks contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the safe harbor for forward-looking statements that's contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of risks and uncertainties in the company's filings with the Securities and Exchange Commission, including Forms 10-K and 10-Q. In addition, any projections as to the company's future performance represent management's estimates as of today, July 27, 2026. Navitas assumes no obligation to update these projections in the future as market conditions may or may not change except to the extent required by applicable law. Additionally, the company's press release and management's statements during this conference call will include discussions of certain measures and financial information in GAAP and non-GAAP terms. Included in the company's press release are definitions and reconciliations of GAAP to non-GAAP items, which provide additional details. For those of you unable to listen to the entire call at this time, a recording will be available via webcast for 90 days in the Investor Relations section of Navitas' website at www.navitas.com. And now it's my pleasure to turn the call over to Navitas' President and CEO. Chris, please go ahead.

Good afternoon, and thank you for joining us on today's second quarter 2026 earnings call. We appreciate your continued interest and support as we execute our strategic transformation to Navitas 2.0. In the second quarter, delivered increasing revenue of 22% sequentially, coupled with a stronger third quarter guidance. High power markets grew more than 50% year-over-year, serving as further evidence of the building momentum in our GaN and high-voltage IC product, especially in our focused area of AI infrastructure. We're also delivering on our Navitas 2.0 transformation. We are well ahead by over 1/4 of expected action for nearly all sales to be coming from high-power market by year-end, with revenue contribution for mobile and low-end consumer being insignificant. We continue to deliver step by step on what we said we would do, and this quarter serves as another proof point of our consistent progress. Over the past several quarters, we have aggressively pivoted the entire organization to focus on high power market, where Navitas GaN and high-voltage SiC technology can deliver meaningful differentiation and increase long-term value. The resource reallocation and organization realignment is now substantially complete with new leadership in place and a refreshed product and technology road map we are sharpening our focus on AI infrastructure, which comprise both AI data center and the grid energy infrastructure required to power them. Combined, this AI infrastructure market represent the vast majority of our long-term serviceable addressable market for GaN and high-voltage SiC and underpin our future growth trajectory as a high power company. Turning into a closer look at our reported results and progress for the second quarter. As previously mentioned, total revenue increased 22% sequentially to $10.5 million, driven by growth across our high power markets. High Power represent the majority of our overall revenue mix with revenue contribution from mobile in Q2, declining both sequentially and year-over-year as in the prior quarter. I also want to highlight that both GaN and SiC contributed to our sequential growth with a particular acceleration in our 6 business during the quarter. As expected, we also delivered expanded gross margin as a result of more favorable revenue mix towards higher value, higher power product and improving scale. Notably, our strong momentum continues to build and accelerate into the second half of the year. Our expanding backlog extend beyond '26 coupled with record book-to-bill supporting our expectation for continued double-digit quarterly growth through the second half of the year. The third quarter will also represent a return to year-over-year growth, driven entirely by high power markets. This also translates to achieving mid-single-digit revenue growth for the full year, while similarly having substantially exited the mobile and the low-end consumer market. This is a significant change in the revenue composition for the company and clear evidence that we are delivering on Navitas 2.0 transformation. With growth increasingly driven by a combination of AI data center, and grid and energy infrastructure. We expect AI infrastructure market will represent more than 1/3 of our total sales by year-end, setting the stage for continued momentum in 2027. While we are nearing completion of our transformation to a high-power sharp-focused company, our focus continues to be grounded in 4 key pillars: market focus, technology leadership, operational efficiency and financial discipline. Starting with our focus on high power market. The rapid adoption of AI is driving immense market demand for overcome critical power bottlenecks across AI infrastructure including both AI data center and Green Energy. As a result, Navitas unique ability to deliver high-power products, leveraging both GaN and high-voltage SiC technologies, we are benefiting from accelerating momentum to enable customers' high-power application within data center as well as the grid and energy infrastructure needed to supply them with power. Together, those 2 areas of AI represent the large majority of our long-term sand growth trajectory and where the company is headed. In AI data center, we are currently generating growth ahead of the market transition to [Indiscernible] DC. For example, increasing power level in AC/DC power supply units are driving the need for higher density which, in turn, is accelerating the replacement of silicon with our high voltage SiC. We are also actively engaged with hyperscales merchant power customers, telecenters OEM, ODM and multiple programs ramping in the second half of '26 that will accelerate throughout 2020. We're also seeing strong traction in DC/DC PSUs and battery backup units where both our SiC and GaN solutions are being designed in. Again, this activity is happening today in advance of the 800V transition. In fact, we continue to believe that the transition to 800V architecture for next-generaton AI data center will happen in 2027. As various xPU, GPU with hyperscalers will introduce it at different times, and it will unfold in a series of steps. Each step will represent an inflection point that drives increasing momentum and explosive growth for Navitas high-power GaN and high-voltage SiC content. I will briefly walk through each of those inflection points, which also outlined in the earnings related slide deck that we've posted to the Investors section of our website. What's clear is the evolution to 800V is inevitable as it remains the industry's only path forward to achieve much higher power and higher density AI racks. The first inflection point second half 26 ramp and accelerating in first half '27. SiC adoption in AC/DC PSUs is being driven by power scaling and density requirement independent of the 800V DC initiatives. As the AI day center racks require more power, it is driving AC/DC PSUs, which ultimately drives high density and therefore, accelerating the replacement of silicon by SiC even with 5-volt DC output. This is already underway, and the growth is happening now and will continue throughout 2027 and beyond. Following, there will be a second inflection ramping in mid-2027. First, the introduction of the 800V bus bar in the sidecar rack with power system elements such as AC/DC power shelves and BBU moving from the IT rack to the power side car with output of 800V DC to the IT rack. This change is bringing additional high-voltage content in higher-power AC/DC PSUs now with 800V DC output plus new SiC and GaN content in top of rack DC PSUs and BBU. We are in advanced system design and reliability testing with several key customers and are preparing the ramp. Then the third inflection point, ramping mid to late 2027 really accelerating in late '27 and early 2028. The integration of the high-density DC/DC conversion tightly into the GPU NXP trays using GaN for its superior switching frequency and power density in megawatt scales rack across various GPU, xPU and hyperscalers at various time. At that point, fundamental change happened in data center IC rack power architecture. 800V comes in straight to the servers. This is what most are referring as native on 800V. We're highly confident in our position for 2027 ramp with our GaN. Similarly, the AC/DC PSU will continue to be in higher demand for high-voltage SiC with increased power level and density on top of BBUs and other power system. Lastly, there would be a fourth inflection point 2028 and beyond. This is where solid state transformers come into play an on-site data center, taking mid-voltage AC electricity for utility grid and directly converting to 800V DC, which get distributed across the data center. This is the full 800V DC evolution with ultra-high voltage SiC and GaN across grid monetization, solid state transformers and end-to-end power delivery from grid to core with full wide-band gap solution. Complementing this significant opportunity within AI data center is the equally large and even longer duration market opportunity in grid and energy infrastructure. Today, we are actively advancing design activity and sampling across ESS, solar farm converters, PSUs and solid state transformers application. Our recently introduced 2.3 kV and 3.3 Gen Sic modules obviously excellent feedback, and customers have begun requesting volume samples for system-level testing in the second half of the year. We're also seeing early interest in our new isolated T0-247 family, which offers unique advantage in liquid cooling application. Importantly, I want to reemphasize that Navitas remain technology agnostic, and we are prepared to offer customers the optimal solution, whether that be GaN or high voltage SiC across the full power chain from grid to rack. This unique flexibility is allow us to capture water content per system as well as support multiple architectures. As previously mentioned, both GaN and SiC are contributing to the current growth, and we expect AI infrastructure to drive the substantial majority of our revenue and growth going forward. Turning to our second key pillar. Technology leadership is essential to our success, and we continue to diligently invest in innovation, and expanded product road map for both GaN and high-voltage SiC. On GaN, we are advancing our preface platform solution, including the 800 to 6-volt DC/DC power delivery Board demonstrated at recent industry events with a 800 to 12-volt version in development. We have kicked off a new program utilizing Navitas unique solution to maximize system efficiencies in the secondary side or 800V data center Topologies. Our industry-leading DFN 8x8 to site cool package continues to gain broad adoption with superior power density, thermal performance and board space savings. And our 650-volt, 11-milliohm GaN FET remains the lowest RDS(on) high-voltage GaN device in the industry, and we have a significant number of customers preparing for mass production. Additionally, our medium voltage 100-volt GaN is seeing increasing adoption for secondary side and other applications. On the high-voltage SiC, our GeneSic technology based on our proprietary trench-assisted planar architecture continues to differentiate with its best-in-class realibility, efficiency and manufacturability. Attributes that are increasingly critical as voltage scale from grid and energy infrastructure application. We recently introduced our isolated TO-247 product family spanning 1.2 kV to 3.3 kV, delivering module-like performance, the standard discrete footprint with integrated isolation for direct cooling and simplify customers' manufacturing. As mentioned earlier, we're also seeing customer traction in both AI DC and grid and energy infrastructure application. We also recently expanded our SiC portfolio with newly introduced 1.2 kV JFET product line to be released early next year initially targeting AI data center, Solisted transformers and energy grid infrastructure application. Our new JFET product line opens door to address an additional $1 billion of incremental TAM by 2030. Also, we continue accelerating towards our ambition to deliver best-in-class ultra high-voltage SiC technology and product and are already in discussions with selected customers regarding the planned third quarter release of our new 6.5 kV SiC technology, which we expect to unveil very soon. Additionally, we are currently engaged with on the development of next-generation 10 kV SiC devices with a prominent lead customer and expected announcement in coming weeks. In addition to expanding our existing SiC portfolio and technology, last week, we announced a strategic partnership for Magnachip to license our GeneSiC Gen 4 and Gen 5 trench-assisted planar technology, spanning 1.2kV, 2.3 kV, 3.3kv and high voltage supported by our supply chain and material ecosystem, the technology will report it, qualify and internalize in their fab in South Korea. This partnership delivers 2 primary strategic benefits. First, it enabled expanding adoption of our SiC technology across more target markets, expanding Navitas technology beyond the technology current focus; second, and longer-term, this collaboration facilitate establishing of another foundry source of Navitas SiC wafers, ultimately strengthening our supply chain resilience and supporting our ability to efficiently scale GeneSiC solution. Our deliberate strategic decision to prioritize AI infrastructure over automotive, unlike some of our competitors has allowed us to bring focused, high-performance product to fact to market faster. I think both GaN and SiC is also seen by customers as a key differentiator and allows us to focus on customer needs, independent of any technology buyers. Additionally, this has allowed us to secure initial design wins with key customers that will continue to support our long-term growth trajectory for years to come. Operational efficiency. With respect to operations, we are making excellent progress on our strategic partnership with GlobalFoundries lead part from our pivot to 8-inch gain are on track for customer sampling and qualification before year-end, and we expect to have initial qualified product in early 2027. This transition will enable U.S.-based GaN manufacturing, supporting national security application and long-term supply chain resilience. I also want to note that we have secured appropriate buffer capacity at TSMC would ensure a smooth transition for existing customers throughout '29 and beyond. In addition, we continue to further strengthen and streamline our supply chain, consolidating to fewer, more strategic OSAT partners that are better equipped to support high power at scale. Internally, we are also increasingly leveraging AI tools across designs, operations and other functions to accelerate execution and improve efficiency as we scale. In terms of the fourth pillar, maintaining financial discipline continues to be a fundamental operating principle. Over the past 9 months, as we have transformed the organization with realized significant efficiency and have held operating expense essentially flat. With our transformation now substantially complete. And with a clear visibility into accelerating report, we are prudently increasing investment in specific areas, including expanded product development like our JFET or ISO-TO, strengthening customer support for key committed program and enhancing operational readiness for upcoming ramp of volume shipments. Each of these objectives are directly aligned with our goal of capturing a substantial multiyear growth opportunity for GaN and high-voltage SiC solution across AI infrastructure markets. Also, we recently raised additional capital to further strengthen our balance sheet and support ongoing strategic execution. More specifically, with $567 million of cash at quarter end, we now have increased flexibility to fund strategic investments in our business, including our Foundry Plus program, capacity expansion and supply renovation agreement with our foundry partners as well as potential strategic inorganic opportunities. That being said, I want to be clear that our immediate and overarching focus remains on driving strong top line growth together with gradual gross margin expansion through improving mix and scale while maintaining an unwavering path towards becoming a profitable high power compete. In closing, I'm very pleased with our continued progress and growing momentum. Q2 represents another proof point that we are executing on our strategic Navitas transformation. We are delivering on our commitment to achieve quarterly growth by year-end will have substantially completed our transition to a high power company and expect to be back to year-over-year growth. This majority of the growth is being driven by AI infrastructure market. This is also supporting our expectation for continued double-digit growth for the second half, setting the stage for continued growth momentum into '27 and beyond. With our substantial cash balance and market leadership, we are well positioned to deliver sustained growth as we capitalize on the opportunity to enable the AI revolution with our differentiated high-power GaN and high-voltage SiC. With that, I'll pass the call to Tonya to review our second quarter financials and the third quarter outlook.

Thank you, Chris. Before I begin, please note, unless otherwise indicated, I will focus my comments on non-GAAP results. A detailed reconciliation of all non-GAAP to GAAP financial measures can be found in our press release published earlier today. Revenue in the second quarter of 2026 was at the high end of guidance, increasing 22% sequentially to $10.5 million. This represents an increase of approximately $1.9 million from the $8.6 million in the first quarter. As Chris highlighted, the double-digit growth was driven by increased traction in high-power markets, which grew more than 50% year-over-year and reflects a notable improvement in our revenue composition as our mobile and low-end consumer business continues to be a smaller portion of overall revenue. We continue to expect this historical business to become insignificant by year-end. As a result of improved product mix and higher quarterly revenue, gross margin expanded by 50 basis points sequentially and 100 basis points year-over-year to 39.5%. Our accelerating shift in overall revenue mix towards higher-value, high-power markets and away from mobile and low-end consumer remains fundamental to our ongoing gross margin expansion strategy. We continue to expect gradual improvement in gross margin throughout the year as we drive top line growth in high-power markets, coupled with expected return to year-over-year revenue growth. Operating expenses for the second quarter were $15.5 million compared to $15.0 million in the prior quarter and $16.1 million in the same quarter a year ago. Operating expenses for the quarter continued to reflect our commitment to focused and disciplined spending. OpEx was at the high end of our guidance range as we began making incremental investments in the business, particularly in new R&D programs to accelerate growth. Having diligently maintained effectively flat OpEx in recent quarters during our strategic transformation, we are increasingly focused on the resources and investments required to support the longer-term success and sustained growth of the transformed company. As such, we are targeting a prudent increase of approximately $1.0 million to $1.5 million in quarterly OpEx beginning in the third quarter. This equates to a roughly 10% increase yet remains meaningfully lower than our expected top line growth rate. The incremental OpEx will be allocated to scaling the business, including investments to accelerate new product development, strengthen our engineering and application support for key committed programs and reinforce operational readiness in advance of expected growth in ramping shipments. Loss from operations in the second quarter was $11.4 million compared to a loss of $11.7 million in the prior quarter and $10.6 million in the second quarter of 2025. In Q2, weighted average basic and diluted shares outstanding were approximately 240.7 million, resulting in a Q2 loss per share of $0.04, flat to the $0.04 per share loss in the prior quarter and compared to a loss of $0.05 per share in the year ago second quarter. Before moving to the balance sheet, I want to briefly provide additional context related to our reported GAAP net loss for the second quarter. Results on a GAAP basis included a noncash charge of $203 million related to the October 2021 business combination earn-out share provisions that were contingent upon stock price depreciation targets. These earn-out shares were deferred merger consideration paid out to stockholders in connection with the company's de-SPAC transaction. This earn-out was fully recognized and settled by the end of Q2 and no further charges related to it are expected. As such, going forward, there will no longer be an associated line item for the change in fair value of this earn-out liability reported under other income or expense on the company's statement of operations. Turning to the balance sheet. Cash and cash equivalents at the end of the second quarter 2026 were $557 million compared to $221 million at the end of the first quarter. The increase in cash and cash equivalents primarily reflects the additional capital raised during the quarter of approximately $373 million at an average stock price of $21.89, which meaningfully strengthened the company's balance sheet and overall financial position. As a reminder, the company continues to have no debt. In addition to bolstering liquidity and working capital flexibility, the significant added capital ensures ample resources for accelerating our continued transformation into a scaled high-power company. This includes strategic investments in support of advancing our Foundry Plus initiative, potential capacity expansion and supply reservation agreements with our U.S.-based foundry partners as well as potential pursuit of selective strategic opportunities. With respect to inventory, we ended the second quarter with $19.5 million of inventory compared to $14.9 million in the prior quarter, reflecting the start of our build of appropriate buffers of TSMC wafers to ensure a smooth transition for our customers. This buffer inventory is also reflected in an approximately $15 million increase in Q2 prepaid expenses and other current assets on the balance sheet until the wafers are received as inventory in future quarters. The sequential $4.6 million increase in Q2 inventory and $15 million prepaid for future anticipated wafer receipts primarily reflects our measured investment to support customers' future anticipated AI data center growth. More broadly, channel and distributor inventory remains at healthy levels. Moving to guidance for the third quarter of 2026. We expect accelerated sequential growth with revenue increasing 28% to $13.5 million, plus or minus $0.5 million. At the midpoint, this also represents a return to year-over-year growth while reflecting a completely different revenue composition as we rapidly shift away from mobile and low-end consumer with growth driven by high-power markets and specifically AI infrastructure. Non-GAAP gross margin is expected to be 39.7%, plus or minus 100 basis points, which at the midpoint represents a 20 basis point increase, reflecting a continued favorable shift in revenue mix toward high-power markets and some additional improved scale. As previously discussed, we are moderately increasing our investment in OpEx going forward to further accelerate our expected future growth. Non-GAAP operating expenses are anticipated to range between $15.5 million to $17.5 million. That concludes our formal remarks. Operator, please open the call for questions.

Congratulations on the nice third quarter outlook. Chris, I guess I wanted to start, there's been a lot of noise and sort of chatter in the market that 800V architectures may be delayed, including confirmation, I think, that NVIDIA's Kyber Rack may have been canceled to be replaced by something as of now that's unannounced. But given some of this noise around 800V architectures, can you just sort of comment on what you're seeing in terms of adoption of 800V and whether there's any impact on your 2027 revenue outlook as a result of perhaps architecture shifting around?

Thank you, Quinn. This is Chris. And I would have bet you would have asked that question. So we provided in the early comments the steps, okay? And I call that the inflection point. So first of all, I want to reiterate that thanks to the fact that we have both GaN and SiC, we are able to grow ahead of the 800V. Number two, you probably saw that what I call the inflection 2 is the introduction of the 800V through the power side car, right? And by the way, that's studies as well for the plus or minus 400-volt, which is used for the xPU and the ASIC. And you can see there, there's already a step, okay, in the usage and the step-up in the content in both GaN and SiC. Moving to the third inflection point, which is I think what you're referring to so-called the native, 800V where the DC/DC conversion moves down to the GPU tray. Of course, I'm not going to comment on NVIDIA and Kyber plan. I would -- I believe they've made a communication about their plan, and I would refer you to that. What I would tell you, though, is I think there is a misconception in the 800V being a digital switch. If you look at the inflection #2, it's actually the start of the 800V through the Kyber rack. That's number one, which will drive more SiC and more GaN content. Number two, even if you look at inflection#3 which is where the GaN content really step up as you move the DC/DC into the compute tray and you have no choice than to use GaN because of the switching frequency. The one thing I would tell you is you have multiple GPUs, you have multiple xPU, you have multiple platforms. What we see is that this ramp will happen in steps throughout '27, of course, accelerate in '28. But it's not a one thing, okay, and one customer. So the short answer to your earlier question, do we see that as a change in the outlook of [indiscernible]? The answer is no. And I think that goes back to multiple times you heard me saying that having both GaN and SiC is a strategic advantage for us to capitalize to capture content and is even more so today.

Got it. And then I was wondering, Chris, if you could talk about sort of applications for your new silicon carbide JFET product line that you discussed on the call? Is that mostly AI infrastructure, energy grid infrastructure, kind of where are some of the initial applications you'll target with the silicon JFETs?

So thank you for that question. It's actually a very strategic decision that we've made to expand our SAM. As I mentioned, this will add nearly $1 billion of SAM by 2030. I think [indiscernible] has even referred to $1.3 billion of SAM by 2030. This is essentially a product that is very well suited for safety critical applications. So the focus here is going to be both AI data centers and the energy grid infrastructure. So you find it in applications like eFuse, or, ORing, ofcourse solid-state circuit breakers, anything that helps to protect as you move to higher power, the protection -- circuit protection and power protection has become a bigger thing. And I think this is a SAM that will actually accelerate in the future. I'll just give you an example. I just met an SST customer, right? And we've been talking about ultra-high voltage for a while with them. Just the fact that we can offer 1.2 kV up to 3.3 kV JFET, the SAM that we could capture in that SST went up by 40%, okay? So this is a significant -- and thank you for the question. It's actually -- I'm glad you did. This is actually a significant decision that we've made to expand the portfolio with JFET.

Your next question comes from Jon Tanwanteng.

Can you hear me?

Yes. I'm sorry, I got dropped, but you can go ahead and ask a question now.

Okay. First of all, congrats. And then second, I was wondering if you could talk a little bit more about the Magnachip deal. Is that a volume or fixed fee type of deal? And when do you expect it to contribute? Would it be this year or next? And then after that, do you expect any more licensing to follow on the back of that as well?

So first of all, thank you, Jon, for the question. This is Chris. I appreciate the question. We just announced that partnership with Magnachip, which, by the way, goes beyond the SiC, where we just announced it the SiC portion. First of all, it's a validation of the technology merits and benefit of licensing MOSFET from GeneSiC technology that we've been in business for quite some time. The way you have to view it, this is not so much about the licensing. I mean, of course, it will, over time, play in our revenue stream, but this is not the prime objective. Number one is expand our SAM because per the press release we've made, Magnachip is actually going to focus on markets that we don't serve. So it's actually going to augment our ability to reach more customers, more markets and more SAM with our GeneSiC technology. Number two is it creates an opportunity for us to partner with Magnachip in the foundry concept. As we talked about, as we see the huge demand ahead of us and the SiC growing at a 60 to 70 basis point CAGR in the context of data center and grid, I think adding more opportunity for us to secure capacity is essential, right? So we're not creating a competitor. We are creating an extension of Navitas, and we are very much looking forward to the partnership in the years to come with Magnachip.

Got it. I appreciate that color. Second, could you possibly comment on the Wolfspeed litigation, what's going on there? What do you think your chances might be and kind of what's at risk?

Okay. So I'm sure you understand that I cannot comment on the specifics of pending litigation. But what I want is to give everybody some context around the litigation. And I'll refer to the Wolfspeed because you asked the question about Wolfspeed, but I refer as well to the Renesas litigation that just came last week, right? And the other thing I would say is everything I'm going to say is actually on public record. So number one, Wolfspeed already sued us because we stopped buying wafers from them a while back. Then they sued us or they sued 2 of our employees that worked at Wolfspeed in the past, including one that they had RIF'd okay, in their cost reduction effort a while back. Then they even tried to file and they failed retraining order when third-party recruiters were calling their people for job position we had online on the web. They failed. And now they sue us for patent infringement, okay, in both GaN and SiC. So in my opinion, this is the last step in a campaign of harassment and intimidation through litigation and looks like a desperate move. Then 2 weeks later, just last week, okay, Wednesday, Renesas sued us. I'm not sure it's clear for everybody, but I want to make sure everybody understand that based on the public record, Renesas would own up to 39% of Wolfspeed. So is all this a coincidence, the week before the earning and all this coincidence, I'll let you decide. Then as I said, the timing is bizarre, okay, and curious, okay? We've been in GaN and SiC for more than a decade, and yet we just got sued by Wolfspeed. I left Renesas more than a year ago in June '25. I'm coming up to 1-year anniversary in Navitas and yet we just got sued by Renesas last week. All this the week before earning. I don't think this is a coincidence. So let's face it, and I'll give you my view there. You don't start litigation like this, if you are winning market share, your technology is superior. You heard today our financial results. You heard the momentum we are building. I gave you the detail of the full inflection point we see for both GaN and SiC and the momentum we have with customers. We're making a lot of progress. So sorry for the long-winded question to answer, but I'll leave you with 2 things. Number one is what we filed in the 8-K when the Wolfspeed litigation came. We respect IP and technology. Actually, the company is a result of decades of innovation coming from start-ups, okay, in both GaN and SiC. And we'll define ourselves. Number two is we let everybody draw their own conclusion on why now Wolfspeed and their major shareholder are running to the cow house instead of competing in a fair way in the marketplace. And that's going to be my only comment on this case during that call.

Your next question comes from Madison De Paola from Rosenblatt Securities.

This is Maddie calling on behalf of Kevin Cassidy. Just in regards to the Magnachip partnership, what other technology licensing opportunities are you considering? And then I have a follow-up after that.

So we licensed to Magnachip, as I mentioned, Maddie, the GeneSic technology. We're always considering -- we're not in the business of licensing our technology. We are in the business of serving customers and growing the top line of Navitas and starting this multiyear growth journey that I talked about with the AI infrastructure. But we're always open to license our technology to partners and people we can partner with.

Okay. Great. And then you mentioned the record book-to-bill and backlog extending beyond 2026. How much of that is -- of the expected 2027 growth is supported by the committed programs versus programs that are already -- or are still in qualification?

Yes. So I'll start. This is Tonya, Maddie. Thank you for your question. We are breaking out what percent is committed in 2027 or what percent relates to our backlog. What we can say is what gives us confidence is the various inflection points that Chris described in his prepared remarks and them coming on top of each other. So it's a compound growth effect. The fact that we have both GaN and SiC, which are both critical to gaining content A few competitors have both and having both allows us to participate, like Chris said, in all of those inflection points. And then also what gives us confidence is the number of programs that are moving through qualification and into production, including design wins and DVTs, EVTs and PVTs.

It's a very good question. I'll add 2 things. Number one is, I mean, you probably saw that we directionally gave you a sense of beyond Q3, how the business is going to continue, right? And the reason we did that is despite mobile going down even faster than we talked about, we're going to grow more than we expected. And we are surprised, and I'm sure you are surprised by the momentum that we have in the business and the outlook that we have today. And that's pre 800V, as I mentioned. That's a very important thing to understand. Now this is not one program, as Tonya said. This is multiple hyperscalers, multiple OEM, ODM, multiple power level of the AC/DC PSUs. And that continues to the inflection # 2, okay, which will be somehow in '27. So for me, what gives me confidence is this is not like -- there is a bit of a shift of the view. I think up to now, the view was the growth for Navitas will come from one large GaN big socket that will come with the 800V transition native, i.e., inflection #3 and the SiC will come from the grid. But this is very different. Today, what we see is across AC/DCs, DC/DCs, BBUs, the internal board in the sidecar rack, in the compute tray, it's 10s and 20s of programs, different programs, different board, different customers. Some of them are SiC. Some of them are high-voltage SiC, some of them ultra-voltage SiC. Some of them are GaN. Some of them are both SiC and GaN. We've seen in a couple of cases that we have, especially for DC/DC PSUs and PSUs, both SiC and GaN. So that's what gives us confidence, Maddie. Of course, we're not going to guide '27. We only gave you kind of directionally how Q4 is going to look like. Just to make the point that the transition to Navitas 2.0 and to be a core company is essentially 1 quarter ahead, okay, of what I talked about 6 months ago. And that's all driven by this 800V and the sidecar rack acceleration that we see.

Your next question comes from Joe Moore from Morgan Stanley.

Great. In terms of the 800V sidecar, you talked about mid-2027 timing. I feel like there's some sidecars in the market maybe sooner. So can you talk about what's the progression for Navitas to penetrate that business?

I think you absolutely -- thank you, Joe. This is Chris. You're actually absolutely right. I think when I refer to the Mid- 27, it's actually really kind of when things accelerate. I think what you're referring to the sidecar rack earlier ramp is the plus or minus 400-volt, which I think is also more attached to some ASIC and xPU. But you're absolutely right that we see, in particular with AC/DC PSUs and DC/DC PSUs and to some extent, BBUs as well, that the Sidecar rack 800V or plus or minus 400-volt is going to ramp earlier next year, okay? But from a meaningful -- what I tried to give in the slide and the remark is trying to give a sense of the step functions of the inflection. I think clearly, there's going to be an acceleration in mid of the year, so Q2. But we see program ramping associated to the sidecar in the first half of next year.

Very helpful. And then in terms of the other markets, you talked about infrastructure as a third exiting the year. Can you talk about what's happening on the performance compute and the non-infrastructure and electrification side?

So on the high-performance compute, as the high-end computers are moving and accelerating the use of much higher power type of architecture, including even embedded GPUs we see a raise of the power level of the PSU's, okay? I mentioned that in last earnings, we moved from 65 watt, 200 watt type of chargers. Now we have customers doing 200 plus, 280 watts. So we see an acceleration in the GaN usage, and that's benefiting us. I would refer to some announcements that were made, for instance, by a large U.S. OEM in computing, for instance, that came up with a super high-end GPU-enabled notebook that basically includes a 280-watt charger, which is full of GaN with a significant content. At that point, you have about $5 to $6 of content of GaN. And then when it comes to the -- even high level, we just released with a customer 1,600 watt, okay, platform that basically helps to power the super high end gaming platform. So those are, of course, not as high volume, but the content is so much higher that I think it has contributed to us. And I think this was -- this business, as we mentioned in the last earnings has actually helped us to compensate and really kind of neutralize us moving from mobile ahead of the AI data center growth, right, which I mentioned with AI infrastructure being 1/3 of our revenue by Q4.

[Operator Instructions] Your next question comes from Tristan Gerra from Baird.

This is Tyler on for Tristan. Building on the last question, what are your expectations for revenue mix between high-end compute and data center exiting this year?

Yes. So I'll start. So we don't break down our revenue by our high-power markets, the 4 high-power markets being data center infrastructure, the 2 of those combined being AI infrastructure, then performance computing as well as industrial electrification. But Chris did give more context relative to by the end of the year, we expect the AI infrastructure to be 1/3 or greater of our total revenue by year-end.

I think the way you should think about this is basically, over the last 12 months, we pivoted from being essentially mobile exposed to essentially being nonmobile exposed. And in the last earnings, I referred to mobile being insignificant by the end of the year. The reason why we kind of gave a sense about the year-over-year growth by the end of Q4 is to kind of really outline that it's actually even less than insignificant. So we're not going to get specific about the numbers here, but I think I said in my -- in my early script that basically, we are 1 quarter ahead of my expectation in terms of mobile being gone. So that gives you a sense, right? And then the other thing that we gave color is the fact that 1/3 of Q4 revenue is coming from AI infrastructure. And you can see really this AI infrastructure being the acceleration of our growth Q2 to Q3 and Q3 to Q4, which I think is why we came higher than the Street expectation.

Yes. And we've also said on prior earnings call and reiterate this time that AI infrastructure is growing at over 50% quarter-on-quarter, both in Q1 and in Q2, and we expect it to accelerate. It's accelerating every quarter.

Very, very helpful. We've heard price increases across the industry. Are you seeing this trend for your products as well? And does that vary across silicon carbide and GaN.

So we've seen price increase in silicon. I think you've seen that across the board and in other technologies like memory and so forth. I'm not going to get specific about price increase with customers. However, as I said before, is as tension come, you expect the pricing to go up. But right now, we're focusing on getting our customers to adopt this new technology and transition to new architecture. So price increase in the core market, and I'm not referring to the market we move away from, has not been so far a focus on our side.

Your next question comes from Richard Shannon from Craig-Hallum.

First one for you Chris, here. When you talk about the 4 stages of inflection within AI data center, are there any particular stages of inflection that you feel relatively more or less confident about the share you're going to get? And if so, do you have any way to characterize where those differences come from like GaN versus silicon carbide or where you have both or anything else? And I recognize the difficulty in answering a question about stages in terms of time when, obviously, the 4 stages a couple of years out here, I'd love to get your sense on that, please.

So first of all, I think on Stage 1, it's happening now, okay? And we are very excited about the amount of program. And really something I mentioned in the earlier remarks is the acceleration the replacement of silicon by silicon carbide, okay? And as you move to higher density and a higher efficiency, higher power level, there's an acceleration there. Then when it comes to Stage 2, and we are in a very advanced engagement and situation with the customer. I mean, at this stage, this is not anymore prototype, right? This is basically large quantity system-level testing, system-level reliability, -- should it be an AC/DC at 18, 23, 27, 30 kilowatt or a DC/DC at 15 to 20 kilowatt or even a BBU, right? So what I like about Stage 2 is that it's multiple platforms, multiple hyperscalers and multiple merchant power per hyperscaler. So it's a lot of program, which I think give us fairly good confidence that we're going to be able to capture a share. When you go to Stage 3, -- what I like about this is we move from -- this is one customer, one large GPU vendor flipping to 800V native, as people call it, being now looked at not just in the GPU rack, but compute rack, but across multiple racks, across multiple xPU, across multiple ASICs. And I think the fact that we've been in GaN for so long, I think, give us a leading advantage. And I think I'll refer to the announcement that we made and the partnership that we announced in the past with some GPU vendors or other hyperscalers. And then step #4, I think the one thing I would change compared to what I said earlier, Richard, is step #4, the big jump is SSD, okay, where really the grid delivers you 800V. But what we see is a lot more application than SST. I referred to BESS last time, PCS and solar. And what I like is that, of course, the big jump is in '28 with the SSD, but really kind of we start to see some nice ramp in '27 as well with the other application, right? So I think it's hard to give you where I think we're going to win more than the others. What I like is that we don't chase one thing here, okay? It's multiple hyperscalers, multiple sockets, multiple merchant power, it's SiC, high voltage, high voltage and GaN. So gives me confidence that we've been able to capture share.

Okay. Great, Chris, for all that detail. Second question is for Tonya on the OpEx here. A couple of questions. You got a little bit wider range as you've had in the past quarters here, $2 million worth. And I may have also missed any dynamics of how to think about OpEx going forward here. But what's the variability or the size of the range? And how do we think about this over the next few quarters? Any seasonality, any other investment cycles? Or should we expect it kind of largely flat for a period of time?

Sure. Sure. Great question. And the way you should think about OpEx and OpEx expanding, and we talked about this in the last earnings call, is relative to it being meaningfully less than our top line growth and our revenue growth. So at the midpoint of our Q3 guide, that's a 28% revenue increase. And even at the high end of our OpEx guide, that would be approximately a 10% increase. So meaningfully less as in the 1/4 to 1/3 range is how we think about it. But you're right, we see a bigger step-up Q2 to Q3 than we're expecting going forward because as Chris and I both talked about in our prepared remarks, we've held OpEx relatively flat for several quarters and then are also meaningfully and purposefully investing in opportunities to accelerate revenue, and you're seeing that culminate in our revenue and our programs. We talked about investing in new R&D projects like the JFET, like ultra high-voltage SiC, the 6.5 kV, 10 kV and beyond, more customer support programs as we ramp in the data center, including application engineering and then that robust supply chain to make sure we're ready ahead of demand. So that's kind of how you should think of that. And we've been doing all of that while keeping OpEx flat in the past and having less of a focus on China market. So the first thing we did is make sure all of our resources were shored up and focused and shifting toward R&D versus other OpEx. And then even within R&D, made sure it was all focused on high-power markets before we started investing again. So that's how I would think of it, but still meaningfully less than the revenue growth, and you see the revenue growth accelerating. So you see a little bit of an uptick in OpEx.

I'll add something, Richard. I think our focus and eyes on getting this company to get profitable has not changed. So the focus is accelerating top line growth and enabling the business with OpEx increase as a fraction of the revenue growth to stay on path for being profitable. With the larger number of programs I mentioned, with the multiple inflection points with the fact that we feel there is a big opportunity for us to expand our portfolio, which means expand our SAM, we decided with the growth coming sooner in second half compared to what we had estimated 6, 9 months ago when I started, we decided to pull the trigger a lot faster, and that's a conscious decision.

That concludes our question-and-answer session. I will now turn the call back over to Chris Allexandre for the closing remarks.

Thank you, operator, and thank you for your interest and your question. I'll leave you with a couple of things, right, 5, 6 points which I want you to take from this call. Number one is the transformation to Navitas 2.0 is essentially nearly complete. By the end of the year, as we told you, we are back to year-over-year growth despite mobile massive headwind, 4 quarters of sequential growth, double digit and a complete change of the mix of the revenue with essentially all revenue by the end of the year being high power and mobile being on. So when I took that role a year ago, we talked about transforming Navitas. I think today, it is transformed and now the focus is how do we execute the strategy, right? The transformation is working. I talked about adding both GaN and SiC being super critical, and we talked about the benefit in the inflection points of having both. We talked about some platform using both GaN and SiC. We talked about the fact that AI infrastructure is 1/3 of our revenue by the end, right? So this is all kind of showing that the transformation is working. The one thing I want to also highlight is this is not one customer. This is multiple hyperscalers, multiple merchant power, multiple platforms, okay? We refer to AC/DC PSUs, which is the first inflection, but I think that we got the question earlier, AC/DC PSUs, DC/DC PSUs, BPUs, SSDs, multiple things, right? So the way I view this is the AI is the catalyst of the large SAM that we go after. We added $1 billion with JFET. Now it's and the revenues transition to Navitas 2.0. So 2.0 is actually who we are, not who we're going to become. And that came 1 quarter earlier than I expected, to be honest with you. And credit to the team and the Navitas employee that did this amazing job to transition this company. And now it's about execution and operational discipline to basically be on the path of a multiyear growth journey and path to profitability, which I mentioned. And that's what I want to leave you with. So it's a very important quarter for us because it's not talking about transforming, it's talking about transformed, okay, which is very important. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.