Navitas Revenue Up 38%, Q4 Spending to Jump: Rapid Earnings Reaction

Navitas Semiconductor's revenue surged 38% in the third quarter to $14.0 million, marking its first year-over-year increase since 2024. This growth led to a 5% rise in shares during after-hours trading. However, fourth-quarter earnings guidance indicates that costs will rise faster than revenue, potentially widening losses before they narrow.

Non-GAAP operating expenses are expected to be about 50% higher than this quarter, largely due to the newly acquired Claros business, which adds costs from day one. Despite the acquisition, revenue is only expected to increase modestly, suggesting a potential widening of the non-GAAP operating loss. The jump in GAAP gross margin is primarily due to the amortization of acquired technology, which reduced a charge in the cost of revenue.

While cash reserves have more than doubled since year-end, a cash flow statement is not included in the release. The company's weighted shares outstanding have increased by 23% compared to the previous year. Investors should monitor whether fourth-quarter revenue meets the guidance and if non-GAAP operating expenses remain near the $25 million mark.

The release does not provide a current figure for AI infrastructure revenue, so it will be important to see if this target of 40% is on track.