Navitas (NVTS) Q3 2025: Mobile Share Drops Below 50% as High-Power Pivot Accelerates Margin Path
Navitas’s Q3 marked an inflection point as management executed a rapid pivot from commoditized mobile to high-power markets, notably AI data centers, performance computing, and grid infrastructure. Leadership’s “Navitas 2.0” strategy is built on reallocating resources, accelerating high-voltage GaN and SiC development, and deprioritizing lower-margin legacy segments. The company expects Q4 to mark the revenue trough, with gradual, higher-quality growth and margin expansion as the high-power transition takes hold in 2026 and beyond.
Summary
- Resource Realignment Drives Strategic Clarity: Navitas is reallocating R&D and commercial focus to high-power segments, moving away from legacy mobile.
- Margin Expansion Anchored in Mix Shift: The company expects higher-margin, longer-cycle business as high-power programs replace transactional mobile revenue.
- Q4 Trough Sets Up 2026 Growth: Management guides for Q4 as the bottom, with sequential improvement expected as new high-power programs ramp.
Performance Analysis
Navitas reported Q3 revenue of $10.1 million, at the midpoint of guidance, reflecting a deliberate pullback from low-margin mobile and adverse China tariff impacts on SiC (silicon carbide) business. The gross margin edged up sequentially to 38.7%—a modest improvement driven by a favorable end-market mix, but still constrained by legacy business exposure. Operating expenses fell to $15.4 million, a sequential and year-over-year decline, as cost discipline and restructuring efforts took hold.
However, the operating loss widened to $11.5 million as cost reductions could not fully offset revenue declines. Accounts receivable decreased, inventory held steady, and the balance sheet remains robust with $151 million in cash and zero debt. Notably, mobile’s share of revenue is set to drop below 50% in Q4, with high-power markets expected to drive all incremental growth going forward.
- Mix Shift Underway: Mobile and China exposure declined sharply, with high-power segments (AI, grid, industrial) poised for outsized contribution in 2026.
- Cost Base Realignment: SG&A and R&D cuts align with the new high-power strategy, supporting future operating leverage.
- Margin Inflection Expected: Management expects gross margins to improve as lower-value shipments are replaced with higher-margin, longer-cycle programs.
Q4 revenue is guided lower as Navitas accelerates its exit from mobile, but management is confident this marks the bottom, setting the stage for higher-quality, more predictable growth as the high-power portfolio ramps.
Executive Commentary
"Navitas is a company with enormous potential, underpinned by strong conventional elements already in place in both GaN and high-voltage SiC. We will accelerate, pivot, and double down on those high-power markets and customers as we move away from consumer and mobile. I call this Navitas 2.0—a transformation to a high-power, sharp-focused company serving grid to the GPU to drive more consistent, profitable, and sustainable results."
Chris Alexandra, President and CEO
"This expected revenue reduction reflects our strategic decision to de-prioritize our low power, lower profit China mobile business, as well as our efforts to level set channel inventory and streamline distribution network to align ourselves with our high power directive. We believe that Q4 will represent the bottom for revenue as these actions will allow us to move faster to concentrate on the high power business and customers that will in turn enable consistent gradual revenue growth throughout 2026."
Todd Glickman, CFO
Strategic Positioning
1. Aggressive Pivot to High-Power Markets
Navitas is executing a full-scale transformation—Navitas 2.0—shifting from commoditized mobile to high-power applications such as AI data centers, grid infrastructure, and industrial electrification. Management is reallocating engineering, commercial, and R&D resources to these segments, with a focus on U.S. hyperscalers, GPU vendors, and energy infrastructure leaders. This pivot is reinforced by customer feedback demanding faster innovation and deeper engagement in power-hungry, next-generation systems.
2. Portfolio and Technology Leadership
Navitas leverages a dual-technology portfolio—GaN (gallium nitride) and SiC (silicon carbide), both key to high-efficiency, high-voltage power conversion. The company’s ability to deliver both technologies at scale, supported by over 300 patents and deep system expertise, is cited as a core differentiator versus competitors. Recent product launches, including 100V GaN FETs and high-voltage SiC modules, position Navitas to serve the full power path from grid to GPU. The NVIDIA 800-volt DC AI factory ecosystem partnership is a critical validation of this strategy.
3. Operational Streamlining and Financial Discipline
Navitas is consolidating its distribution network, reducing channel inventory, and downsizing facilities to align with the high-power focus. The company is also trimming operating expenses and shifting capital allocation to programs with higher margins and longer customer lifecycles. This operational reset is expected to yield improved predictability, higher win rates, and margin expansion as the business becomes less transactional and more programmatic.
4. Customer Engagement Model Evolution
Navitas is moving up the value chain, engaging directly with hyperscalers and OEMs, rather than relying solely on traditional power supply vendors. This system-level engagement, particularly with U.S. customers, is designed to accelerate adoption and ensure Navitas’s technologies are embedded in next-generation architectures.
Key Considerations
Navitas’s Q3 represents a decisive break from its legacy business model. The company is sacrificing near-term revenue in exchange for a higher-quality, higher-margin long-term growth trajectory, targeting secular trends in AI and electrification.
Key Considerations:
- Mobile Revenue Decline Is Intentional: Management is proactively walking away from low-margin mobile business, especially in China, to focus resources on high-growth, high-power segments.
- AI Data Center Ramp Will Be Gradual: Material P&L impact from AI data centers is expected in 2027, with foundation-building and design wins occurring in 2026.
- Margin Structure Set to Improve: High-power business offers higher, more sustainable margins compared to commoditized mobile; customers in these segments value innovation over pure cost.
- Balance Sheet Strength Enables Transition: $151 million in cash and no debt provides ample runway to invest in R&D and scale for next-gen opportunities.
- Execution and Speed Are Cultural Priorities: New leadership is instilling a culture of clarity, speed, and execution to meet customer demands and win in high-stakes markets.
Risks
Transition execution risk is acute, as Navitas must offset the rapid decline of mobile with timely high-power program ramps. Delays in AI data center adoption or slower-than-expected energy infrastructure buildouts could pressure growth and margins. Competitive intensity in GaN and SiC, especially as more vendors enter the NVIDIA ecosystem, remains a threat. Channel inventory adjustments and the timing of design win conversions also introduce near-term volatility.
Forward Outlook
For Q4 2025, Navitas guided to:
- Revenue of $7 million, plus or minus $250K, reflecting the accelerated exit from mobile.
- Gross margin of 38.5%, plus or minus 50 basis points, expected to remain stable before improving as mix shifts.
For full-year 2026, management emphasized:
- Quarter-over-quarter revenue growth, driven by high-power segments.
- Gradual margin expansion as high-value programs scale and legacy declines fade.
Management highlighted several factors that will shape results:
- High-power design wins and customer engagements in AI, grid, and industrial electrification
- Continued cost discipline and resource reallocation to support the new strategy
Takeaways
Navitas is betting on a decisive, high-conviction shift to high-power markets, accepting near-term revenue pain for long-term quality and margin improvement. The company’s technology breadth, system-level customer engagement, and operational reset are designed to deliver durable growth as AI and electrification trends reshape the power landscape.
- Strategic Pivot Is Non-Negotiable: The exit from mobile is not a cyclical adjustment but a structural transformation, with all future growth tied to high-power applications.
- Margin and Predictability Set to Improve: As high-power programs scale, Navitas expects less revenue volatility and higher, more sustainable margins.
- Watch for High-Power Ramps and Design Win Conversions: Investor focus should remain on the timing and scale of AI data center, grid, and industrial program adoption through 2026 and into 2027.
Conclusion
Navitas’s Q3 marks a foundational shift toward high-power, high-margin markets, sacrificing near-term revenue for a more durable and profitable business model. Execution on the “Navitas 2.0” strategy will be critical as the company seeks to capitalize on secular electrification and AI demand, with margin and growth inflection expected as the new portfolio ramps through 2026 and beyond.
Industry Read-Through
Navitas’s rapid exit from mobile and focus on high-power markets is a bellwether for the broader power semiconductor industry. The secular shift toward AI data centers, grid modernization, and industrial electrification is accelerating, with customers prioritizing innovation, efficiency, and system-level partnerships over legacy cost competition. Competitors in GaN and SiC must demonstrate both technology breadth and execution speed to win in these complex, high-stakes markets. The margin uplift potential from such a mix shift is significant, but execution risk remains high for all players making similar transitions.