Navitas Semiconductor (NASDAQ:NVTS) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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Summary
Navitas Semiconductor reported an 18% sequential revenue growth in Q1 2026, driven by a strategic shift towards high power markets like AI, data centers, and green infrastructure.
The company achieved a 30 basis point improvement in gross margin to 39.0%, with high power markets now representing a larger majority of total revenue.
Navitas Semiconductor anticipates continued sequential revenue growth and gradual gross margin expansion throughout 2026, supported by increased customer engagement in high power markets.
The company's leadership team has been revamped with the appointment of a new CFO, Tanya Stevens, and other key positions to support the strategic transformation to Navitas 2.0.
Navitas Semiconductor highlighted its unique position in offering both GaN and high voltage SiC technologies, which are critical for evolving data center architectures and AI infrastructure.
Full Transcript
Tina (Operator)
Thank you for standing by. My name is Tina and I will be your conference operator today. At this time I would like to welcome everyone to the Navitas Semiconductor Q1 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question, simply press Star one on your telephone keypad. To withdraw your question, press Star one again. It is now my pleasure to turn the call over to Leann Savers. You may begin.
Leann Savers
Good afternoon and welcome to Navitas Semiconductor's First Quarter 2026 Financial Results Conference Call. Joining us today are Navitas President and CEO Chris Alexander and CFO Tonia Stevens. I'd like to remind our listeners that the results announced today are preliminary as they are subject to the Company finalizing its closing procedures and customary quarterly review by the Company's independent registered public accounting firm. As such, these results are unaudited and subject to revision until the Company files its Form 10Q for its quarter ended March 31, 2026. In addition, management's prepared remarks contain forward-looking 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 is 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 the 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, May 5, 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 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 and Navitas's website at www.navitasemi.com. and now it's my pleasure to turn over the call to Navitas President and CEO Chris. Please go ahead.
Chris Alexander
Good afternoon and welcome to everyone on the phone and webcast. We appreciate you joining us on today's call. I'm pleased to report that Q1 is expecting another quarter of solid progress and growing momentum on our transformation to Navitas 2.0 highlighted by the company's return to top line sequential growth. For those of you that may be new or still coming up to speed on our story, I want to begin with a brief high level summary of our ongoing strategic transformation and Navitas Supernova vision. Over the past two quarters we have meaningfully reaccelerated our pivot away from the company's historical mobile and low end consumer business to focus the entire organization on higher power markets where Navitas, GaN and High Voltage 6 products can deliver long term differentiation and value. Today we are singularly focused on four high growth, high value markets: AI, Data Center, Energy and Green Infrastructure, performance computing and industrial execution. Our goal forward objectives are to rapidly achieve scale in these high level markets in support of driving sustainable and profitable growth. Turning to an overview of the quarter, our Q1 financial results demonstrated solid quarter over quarter improvement and we observed growing momentum across our high power markets and expanded customer engagement. Highlighting the quarter we achieved the expected return to growth in Q1 with revenue increasing 18% sequentially. The renewed growth was driven by our high power markets which also represented a growing and larger majority of total revenue as we continue to reduce reliance on the company's historical mobile and low end consumer business. Although far too early to declare victory, we effectively completed our realignment of the entire organization and Navitas is back to growth driven by a high power market. In fact, revenue from our high power business grew up 25% year over year with all four of our five high end markets increasing sequentially in Q1. The increased contribution from a high power market also drove the high level mix in our overall revenue mix resulting in improved Q1 gross margin. Consistent with our previously communicated expectations, we anticipate continued sequential top line growth and gradual gross margin expansion throughout the year. The ultimate success of our strategic transformation continues to be grounded in four market focus, technology leadership, operational efficiency and financial discipline. With respect to market focus, we continue to see new technology adoption accelerating across multiple end markets and customers, both of which are increasingly driving towards GaN and High Voltage SiC solutions. Without question, AI is the primary catalyst driving this momentum and leading to the broadening adoption of GaN solutions across all four of our target markets. Collectively these markets represent a serviceable addressable market of $3.5 billion by 2030. This ratio 50:50 between GaN and hybrid solutions will combine heavier exceeding 60%. We are definitely focused on the largest portion of the time, which I'd like to refer as the AI infrastructure comprised of unique but relative growth opportunity across the AI data center and the grid and energy infrastructure, each of which are fundamentally to enabling the AI revolution. Today the aggressive increase in compute power density is accelerating GaN and SiC adoption in their centers while the required mobilization of the energy green infrastructure to support these data centers is driving increased needs for high voltage. Navitas is uniquely positioned as one of the very few companies that can inflame deep long term experience in both GaN and high voltage technologies. We're also agnostic and readily offer customers the ability to choose the optimal solution for the specific application. As a result of our proven capability in both SiC and GaN, we believe it allows us to address more of the power chain and estimate capture without consent persistence, briefly providing the trends and opportunities specific to each of our four targeted end markets starting with AI data centers and the technology. Here in both GaN and SiC Power delivery we support all major AI data center architectures with industry leading power density and efficiency. Again, adding both technology is a strategic differentiator and our ability to fully support a given customer's chosen approach opens up more opportunities across more applications and greater potential lower content for analytics. I've conveyed at the recent Nvidia GTC event in March, AI data center is rapidly evolving towards memorable HVDC architectures leading to expanding content opportunity driven by the need for exponential power levels, increased density and top tier efficiency. Our immediate focus remains on expanding sampling of our newest GaN and SiC products, enabling qualifications, preparing for scale ramp and supporting high volume customers in their ongoing design and development efforts. Spanning from AC DC PSUs and DC DC PSUs and 800 volt HVDC bridge designs at higher power level and density in bridge infrastructure, we continue to advance active engagement across a series of new and existing customers with notable acceleration in design activity in the asset space. AI remained prominent underlying catalyst as all industry participants increasingly acknowledge the existing energy green is not capable of supporting the project in future rollout of AI development. This market where technology and scale are equally important, they present a large and long term secular growth opportunity for our current and future high voltage products. Navitas Genesis technology position us as a leading enabler of the great energy transportation modernization efforts providing customers with more reliable and higher density power through our recently introduced 2.3 KV and 3.3 KV modules and a roadmap to even higher voltage in performance computing. We are seeing sustained healthy adoption of GaN in higher power chargers solution for high end laptops and mobile workstations used for gaming and reality development. Our opportunity in this market continues to be driven by the dramatic increase in power requirements with CPU moving from 15 to 30 watts to 45 to 80 watts in ultra AI notebooks with the integration of GPU requiring up to 120175 watts. As a result, we expect to benefit from growing demand and momentum in performance computing market applications throughout 2026 and beyond. Finally, in industrial electrification we are continuing to see customer traction in both GaN and high voltage SiC in high performance applications such as DC DC converter and megawatt chargers, industrial pump motor control and heavy equipment specification. With respect to our second pillar technology leadership, we remain fully committed to ongoing innovation in GaN and High Voltage SiC driven by focused R&D assistance and demonstrated by expanding customer engagement and co-development project on GaN. We have continued to accelerate sampling of our Android and 650 volt devices to more OEMs and ODM customer pursuing the 800 watt HVD3 architect today of testing GaN and we believe most of this testing with magnetized devices. We are focused on enabling and supporting customers in this transition from silicon to GaN like we have always successfully done in our past. More recently we have seen some customers detail internal reality system level testing on our newest GaN devices. During the first quarter we continue to deepen our collaboration with ODL and hyperscales including direct demonstration of enabling new GaN beam architecture that feature high power efficiency and availability, all of which is leveraging Navitas's more than 10 years of GaN experience and system experience. One of those highlights was our recent release of the 20kW 800v to 6 volt T DCDC platform using our latest 8x8 650V GaN Fan Fest aiming at 97.5% peak efficiency. This platform solution was formally unveiled in March at GDC and showcased at Nvidia ngx. As a reminder, we also previously released an industry leading 800 volt to 50 volt AI DCDC power brick fully GaN six years ago and on the board delivering best in class efficiency and density. These respective platforms are generating strong interest and prospective customer engagement due to their demonstrated ability to deliver the highest power density, efficiency and performance for next generation AI designer architecture. Today our team remains focused on execution including product delivery, qualification and qualification of rustic tightening the strategic growth for CAMS based head on board HVDC architecture in 2027 on high voltage. We continue to strengthen our technology with a focus on high power density and LVD which represent both the primary market drivers and our key differentiators in terms of silicon and packaging. Following the introduction earlier this year of our new industry leading Gen 5 Genesis technology based on our patented French Assisted Planner architecture, in March we released our 1.2 KV Gen5.6 product tailored in packages to address the higher power density, DCDC and ACDC needed in PSU acquisition. We have since delivered samples to OEM and OEL and they are currently being evaluated by most PSU vendors. Initial customer feedback has been excellent with up to 50% increase in power density at greater than 98% system efficiency and improved cooling. Turning to operational efficiency, the prior restructuring action initiated late last year which I discussed in detail last quarter had been substantially complete. As President mentioned today the entire organization and its resources are fully aligned to focus on the high power market. We triggered a substantial strategic repositioning from where the company was just nine months ago. Our team is moving fast and working very hard and their collective dedication is impressive. Recognizing the tremendous opportunities ahead, we plan to continue adding selective engineering skills and competencies to accelerate customer support over the following quarters. Also during the quarter we completed our leadership transformation with the appointment of our new CFO Sonia Stevens who formally joined the team in late March. We now have the full leadership team in place including new leaders in operations, engineering, execution, sales and marketing, business units and finance, all of whom joined the company in recent weeks and months from larger companies with strong track records in execution and scale. Importantly, this new athletic team and our employees are demonstrating strong buying and excitement for Navitas 2.0 and it's a privilege to lead this transformation alongside each other. We also continue to make progress on our strategic technology and sponsoring partnership with Global Foundry on GaN. We are confident this will enable our planned 8 inch pivot in 2027 for GaN manufacturing in the United States. At the same time we are starting to build appropriate buffers with TSMC to ensure a smooth transition for all existing customers. Additionally, we have begun actively scaling our supply chain to support upcoming growth and demand and we leverage AI internally across design and most of the functions to allow us to scale even faster. Our fourth pillar is financial discipline which we are committed to as we execute our scale up plan and transformation to Navitas 2.0, a consistently growing and profitable high power company. This includes remaining diligent with respect to privatizing of investment in a high power program, maintaining leverage OPEX and focusing on high margin long term engagement that build multi international customer credit features. We made significant progress in Q1 with our previous restructuring effort and full arrows high power market now substantially complete. Going forward, we'll continue to drive efficiency across the organization and are committed to disciplined investments in the business even as we target a much larger market opportunity. Our focus remains on top line growth and margin expansion driven by improving scale and mix of our high power business in support of achieving long term profitability. In summary, I am very pleased with the continuous progress and growing momentum we have achieved in such a short period of time. We are taking further steps toward positioning Navitas as a high power company. We anticipate continued sequential revenue growth in the second quarter and throughout the rest of 2026. Q1 was the first clear proof point and the growth in high power market demonstrate the momentum of our Navitas 2.0 strategy. We also anticipate gross margin to steadily improve as volume growth drive better fixed cost absorption and our revenue mix increasingly favors the high power business. Mobile contribution will continue to diminish each quarter and become insignificant by year end. At that time we expect our business and revenue will be defined almost entirely by high power market, a transformation that positions us well for sustainable long term growth and profitability. Before I turn the call over to review of our I'd like to take this moment to welcome Tonia Stevens, our newly appointed CFO. I'm thrilled to have her join our executive team. She brings over 30 years of exceptional, practical financial leadership in the semiconductor industry, most recently at Lattice Semiconductor. I look forward to our valuable contribution as we grow the business and scale our operations to a larger, financially disciplined and profitable company. With that, I'd like to go to Tonia to introduce herself and review our first quarter financials and second quarter outlook.
Tonia Stevens
Thank you Chris. Before reviewing the financials, I would like to take a moment to introduce myself and share my motivations for joining Navitas. My corporate finance career spans more than 30 years and beGaN with seven years in public accounting. I've since spent the majority of my career in the semiconductor industry including 17 years at intel in corporate finance. In the last seven years at Lattice Semiconductor as Chief Accounting Officer and previously Interim cfo. I'm incredibly excited to join Navitas for several reasons. The team is comprised of extremely talented and capable leaders and individuals who are laser focused on executing the company's strategic objectives in a rapidly advancing and high velocity environment. Together with its compelling technology portfolio, the company represents a pure play GaN and SiC opportunity to scale up and capitalize on the substantial AI driven secular growth in High Power markets. It's a privilege to be part of the Navitas leadership team and I look forward to meeting many of you that I haven't met already over the coming weeks and months. With that said, I will now review the financial results for the first quarter 2026 and then discuss our outlook for the second quarter. 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 first quarter of 2026 exceeded the high end of guidance, increasing 18% sequentially to 8.6 million on a GAAP basis. This compares to revenue of $7.3 million in the fourth quarter and $14.0 million in the first quarter of 2025. As Chris highlighted, the return to sequential growth was driven by high power markets which grew approximately 35% from the first quarter 2025 and now represents a large majority of total revenue as the company continues to reduce its revitals on historical revenue contribution for mobile and low end consumer business. Notably, we expect high power markets to continue driving sequential growth throughout 2026. The higher quarterly revenue and improved revenue mix drove a 30 basis point expansion in gross margin which improved to 39.0% from 38.7% in the prior quarter to and 38.1% in the first quarter of 2025. The shifting mix of total revenue toward higher value high power markets and away from mobile and low end consumer is key to our gross margin expansion strategy. We expect sustained gradual improvements in gross margin throughout the coming year. Operating expenses for the first quarter were 15.0 million compared to 14.9 million in the prior quarter and 17.2 million in the same quarter a year ago. Operating expenses for the quarter reflect our commitment to focused and disciplined spending, particularly in sga, which created the opportunity to invest more in R and D projects quarter over quarter in support of our strategic pivot to now the cost 2.0 while keeping total operating expenses flat. Loss from operations for the first quarter was 11.7 million compared to a loss of 12.1 million in the prior quarter and 11.8 million in the first quarter of 2025 in Q1 dilutive shares outstanding was approximately 230 million resulting in Q1 loss per share of $0.04 compared to $0.05 loss in the prior quarter. Turning to the balance sheet cash and cash equivalents at the end of the first quarter 2026 were 221 million compared to 237 million at the end of the fourth quarter and the company continues to have no outstanding debt. With respect to inventory, we ended the first quarter with 14.9 million compared to 13.3 million at year end. The sequential increase in inventory primarily reflects our measured investment to support future anticipated revenue growth. With respect to channel and distributor inventory, as a result of previous streamlining actions taken during the latter part of last year, we now have a significantly healthier channel inventory profile. Going forward, we are committed to disciplined monitoring and management of these inventories to ensure we are well positioned to respond quickly to end market demand. Overall, the balance sheet remains very strong and provides the company with an extensive amount of liquidity as well as ample flexibility in terms of working capital to execute our strategic objectives and anticipated growth. Moving to guidance for the second quarter of 2026, consistent with the company's previous communications, we expect continued sequential growth with revenue increasing to 10.0 million plus or minus half a million. At the midpoint. This represents over 16% sequential growth compared to the first quarter of 2026. Non GAAP gross margin is expected to be 39.25% plus or minus 75 basis points, which at the midpoint represents a 25 basis point increase, primarily reflecting the ongoing shift in revenue mix toward higher power markets. Non GAAP operating expenses are expected to remain approximately flat sequentially between 14.5 to 15.5 million. As we continue to emphasize disciplined cost management moving forward, we may choose to selectively invest in OPEX to accelerate growth at a fraction of the rate of revenue growth. That concludes our formal remarks. Operator, please open the call for questions
Tina (Operator)
as a reminder. To ask a question, simply press Star one on your telephone keypad. Our first question comes from the line of Tristan Jara with Baird. Please go ahead.
Tristan Jara (Equity Analyst)
Hi, good afternoon. I know it's still probably a bit early, but would you be able to talk about the dollar content that we could expect per rack for silicon Carbide on the first generation 800 volt architecture? And then what type of ramp in content should we expect with cyber for both silicon carbide and. Okay. Hi Tristan, this is Chris. Thanks for the question. If you refer to prior communication. Right. We gave guidance in terms of content per megawatt because that's how the best way to kind of define the content we talked about for GAN in the range of 10 to $15,000 per megawatt, really driven by the native 800 volt HVDC when the DCDC gets inside the rack, as we discussed properly in the AC DC PSU there's about 5 to $8,000 per megawatt which is coming from both the higher power of those PSUs. If you refer to GTC, Nvidia announced that at the end of the year the PSUs, the ACDC are going to get to 18.5kW which is much higher than what we see today. So you have a benefit of that increase. And the other factor is, if we look at the power level from today's PSUs, the ACDCs which are in the range of 5 to 10 kilowatts to 18.5 kilowatts for Nvidia, but even 25 to 30 for other hyperscalers, there's a ratio of when power goes up by 2, the sig content goes up by 5. So there is a non linear increase. Right. So I'm not going to get specific in terms of content because it really depends on the architecture. One phase, three phase. Moving to three phase. But refer to the 5,000 to $8,000 of content for the SiC inside the center, which is mostly AC DC PSUs and the mental model which I just mentioned, which is when the ADCDC move From let's say 5 to 10 kilowatts to 18 to 25 to 30 kilowatts, there's about 2.5x content acceleration compared to power level. Thank you. That's very useful. Yeah, very useful. And then for my follow up specific to silicon carbide, you know clearly pricing's been coming down drastically in 24, 25. Given the ramp that you see, do you expect pricing to stabilize? And I know you're going to be in a very high voltage, so how different is that pricing dynamic there than in the lower voltage? But also do you expect at some point supply demand balance in silicon carbide? So we don't participate, as you know to the low voltage SiC business inside mostly industrial and ev. Right. What we see is for inside Data center, the AC DC mostly use 1.2 KV and above.650 sometimes and 1.2 KV and above. Right. Where the driver today is more speed, reliability and density. So of course this is a competitive market and as the hyperscalers are driving more power and more PSUs and more PSUs per rack there is quite competitive today. What we've seen is what the customers are pushing us on is how we execute and how we help them to get to the best scalability and the best density of power, which I think save a lot more money at the system level than a cheaper device. Great thank you very much. Welcome Tristan. Thank you.
Tina (Operator)
Your next question comes from the line of Madison Depaulo with Rosenblatt Securities. Please go ahead.
Maddie (on behalf of Kevin Cassidy)
Hi guys, this is Maddie calling on behalf of Kevin Cassidy. So you highlighted that GaN and Sick are both playing vital roles in AI power and that you guys are uniquely positioned to win both technologies. And I know you mentioned this, but can you provide any more color on how having both capabilities is helping in customer discussions or design when activity in data center over your larger competitors?
Chris Alexander
So, hey Marlee, this is Chris. So first of all I think we focus on the high power markets, right? So we have four markets. Each of them have a different flavor of of architecture and technology. If I refer to AI in the center, it's mostly a GaN and SICK play. If I look at grid infrastructure, it's mostly a SiC play. Of course, high performance computing is more GaN play and industrial is actually both a SICK and a GaN play. A SiC and a GaN play, right? So if you look at the first two, which is what your question is, right? If you look at the evolution of the architecture. So let's zoom out a little bit, right? Today in the current architecture, the Traditional architecture is 50 volt bus bar where the voltage from the grid which is 480, 400 volt AC is converted to 50 volt DC. Right? That mostly used SiC. Okay, and that's been going for a while, right? The first step, and I think I refer to what has been announced to a GTC, right? The first step is to the 800 volts is the introduction of 3 phase much higher power which I refer to in my answer to Tristan. The first phase is most higher power three phase AC DC, right, where you convert the 400 volt 480 volt AC into 800 volt DC. Okay, that's the first phase that's going to stop at the end of the year, early next year, right? That on the AC DC we use mostly SiC. Now there is a DC DC conversion to that. If you refer to what Nvidia announced at GTC, there is a DC DC top of rack converter, right at 15 kilowatt for instance. Both use evergan or sic. So adding both is already right there, enabling customers to have a choice depending on their preference. What is very interesting is when you move to the next step, which is the second phase of the 800 volt DC architecture where you get to let's call it high density rack. So megawatt rack, would it be kyber for Nvidia or more other high density racks for the Googles of this world and the others. Right. That's where you move the DC DC conversion inside the tray, inside the rack. When you do that, you have no choice than to use gan. Okay. Because the level of density, level of power requirements is making it impossible to use silicon. But also silicon carbide doesn't have the switching frequency. So that's where you're moving to gap. Right. And the fourth step is when you replace. That's more on the grid side. When you replace the AC DC PSU on the sidecar track basically by ssp. So if you think about this is a continuum of architecture change and evolution and I think both helps us to sit at every table. So should it be current generation, next generation, Next next generation? And how less and two guys are evolving from current architecture to next phase of Elon revolt into a high voltage, high density rack. Sorry. And even down the road with the reorganization and the restructuring of the grid.
Maddie
Okay, awesome. Thank you guys. Thank you, Marty.
Tina (Operator)
Our next question comes from the line of Quinn Bolton with Needham and company. Please go ahead.
Shadi Miwali (for Quinn Bolton)
Hey guys, this is Shadi Miwali. Offer Quinn, thanks for taking our questions. My first question is for Chris, but do you have any big picture takeaways from GTC and APEC in March, especially in regard to the direction of GaN versus SICK in 800 role data centers?
Chris Alexander
So my takeaway was kind of what I just mentioned to Maggie. First of all, We've talked about 800 volt architecture now for more than a year. It's happening. Okay. I think Nvidia was very clear that they see at the end of the year, early next year. Okay. This what I call the first phase of the 800 volt HVDC architecture where you basically do the AC DC at a much higher level of power with SiC and then you do a DC DC where you can use other Ganon SiC. Right. But also outlining that as you move to next step, the move to much higher density rack is kind of enabling GaN content to go to next level. So that's my takeaway from The GCC is 800 volt is happening. Now keep in mind that there is we talk about Nvidia here, but the other hyperscalers, they might have a different path. They might actually go even faster to the next phase where you get the power, the DC DC power enabling directly on the tray and in the rack, which will accelerate the GaN adoption. So I would say I come out of GCC with the stronger conviction. Adding both makes a huge difference. I think we talked about this before where I said Navitax is uniquely positioned because we have both SIC and gan. I think it's actually very hard for supplier to sit at the big table if you either have GaN or if you have a SiC. Okay. And there's only a handful to not say a very few number of suppliers who are both. And that's a key differentiation. So that's my takeaway on top of the fact that air hole not accelerating.
Shadi Miwali
Great, thank you. And then my follow up is just on the product landscape for gan. But as you're sampling with hyperscalers, what are some of the key specs that matter most of them when evaluating GAN products and how does your portfolio measure up against those requirements? Thank you.
Chris Alexander
Thank you, Sean. So what we said before is we sampled both high voltage, so 650 volt GaN as well as mid voltage GaN 100 volt. We've done that in different flavors of package. Okay. Depending on the level of integration and density that the customers are looking. In the last quarter we mentioned we've done the initial samples. Since then we've now delivered the final samples. Okay. Which is basically the samples that would go to production. We are working with customers on, you know, they move from I would say device level testing to kind of bold system level testing. And you know, the feedback we get is our technology as well as packaging offering is actually adequate to what they're trying to do.
Shadi Miwali
Great, thank you.
Tina (Operator)
Your next question comes from the line of Richard Shannon with Craig Hallam Capital Group. Please go ahead.
Tyler Anderson (on behalf of Richard Shannon)
Hi everyone, this is Tyler Anderson on for Richard. Thank you for taking my questions. I was just wondering, could you talk about why customers would want to upgrade transformers that aren't connecting to data centers? And have you heard of any talks within the government to force the upgrade of transformers?
Chris Alexander
Okay, so I'll stop by the. By the last part of your question, we have no knowledge of any forcing function or requirement from the government to move from traditional transformers to ssp. What I would tell you is if you look at, and I think we've released some slides in our investor package, right. If you look at the transformers today are very kind of old school, so to speak. Okay. They are operating at low frequency, which is in the 60 Hz. They have limited efficiency which is less than 95%. They are heavy metal. They are very large and very big. And as you move to an explosion, because that's what we're talking about, explosion of rollout of AI data center, which basically pull from the grid a lot more energy. You have to Install a lot more transformers. That's going to be at some point impossible if we keep the conventional transformer. So the move to SST is a bit of necessity as we scale up and deploy the hundreds of gigawatts in the next few years. The other thing I would refer to is, we keep referring to SST, but when we talk about grid and energy, this is going beyond the SST. The SST is going to be the last step of evolution. Today you have much higher level of power of transformers, megawatt converters, you have grid type solar farms that are being deployed. So there's a lot of grid type applications are being deployed, which we see as a growing driver even in 26 and 27, ahead of the big acceleration of the SST, which will come really in late 27, early 28. Makes sense, Dino.
Tyler Anderson
That does. I, I'm just, I'm also wondering, you know, if there's anything around the switching. I'm seeing something about. And, and please, I, I understand I may be wrong on this or going down the wrong path. Correct me if I am. Aluminum conductor, steel transformers, you know, I'm seeing things about them wanting to focus on the switching. Would you be able to benefit from, from that upgrade and the switching?
Chris Alexander
I mean, yes, you will. But I think the grid companies have realized that the only way to make the grid, as I said, compatible with the acceleration of power is really to get to this new form of conversion. Less conversion, less steps. Moving from super high voltage to 8 on the DC through a form of electronification of the grid. Okay, for lack of better words. Right. And I think this will require sustain and isolation transformers, basically.
Tyler Anderson
And then have you heard of any conversations around the lack of supply of transformers accelerating anything with your customers?
Chris Alexander
I have not. But I would not be surprised that the requirements for volume in terms of classic transformers and the dependency on metal and a few other things might actually play also in the acceleration of the modernization of the grid.
Tyler Anderson
Okay, thank you.
Chris Alexander
You're welcome.
Tina (Operator)
As a reminder to ask a question, simply press Star one on your telephone keypad and your next question comes from the line of John Ken Won Tang with CJS securities. Please go ahead.
Jeremy (on behalf of John Ken Won Tang)
Hi guys, this is actually Jeremy on for John. Thanks for taking the time. Can you just talk a little bit more about the sequential improvement you're seeing heading into Q2? If that's mostly data center driven and if you're meaningfully ahead of where you thought you were going to be a quarter or two ago. Thanks.
Tonia Stevens
Yeah, so this is Tanya. Hey, Jeremy. So I'LL start and let Chris add. So relative to your point, in high markets, if you remember, in Q4 we talked about High Power being the majority for the first time in the company's history and we talked about it being greater than 50%, mobile being less than 25% and a vast majority of the company last year. Now in Q1, high power continued to grow. It was a large majority of the company, like you heard us say. And throughout the year, to your point, we expect it to continue to grow as a percent of the company and we exit the year almost an entirely high power company. And that being driven by what you said, the data center and the grid info and the grid and infra, the AI infrastructure component of that. So you saw in our press release and our discussions, high power grew 35% year over year from Q1 of 25 to Q1 of 26. And we expect that growth to accelerate in 2H26 and again driven by both components. But the key catalyst is that AI component and the momentum is driven by all of the high power markets, but particularly the AI infrastructure and that's data center and energy grid.
Chris Alexander
I'll add something. Jeremy, thank you for the question. So first of all, if you look at Q4 to Q1, when we grew 18%, we said, as Tony has said, that the high power markets grew as a percentage of the company, mobile went down. So that means that the growth of High Power was actually much higher than 18%, the top line of the company and grew 35% year over year. Now we don't break down by markets, right? We don't, we refer to kind of high power. But we also said in our script that all markets grew sequentially and as we see this will continue out throughout the year. Now I'll give you one data point. Okay, Tony, I referred to, and I referred that also in my script about AI infrastructure and what this means is we are combining within the high power. We're combining data center and grid. And the reason why we do that is what I've noticed is the driver of the grid is data center. So at the end of the day, you cannot look at AI data center and grid energy as two independent markets like computing would be. Right. This is really kind of intertwined and interlinked. That business grew 50% quarter from Q1 to Q1. Right. That's the only color I'm going to give you. Right. So as the company grew 16%, sorry, 18% quarter, the combination of data center and green infrastructure grew 50%. That's stronger than expected. Okay. You asked me where I think we were. We are versus where I thought we're going to be. That's stronger than expected. And the reason why it's stronger is that we all see it. It's an acceleration of rollout. We have not seen yet. The content going up. I talked about the fact that content is going to go up. Okay, the content is going to go up because when you move from a 10 kilowatt PSUs to 18.5 kilowatt PSUs or even a 25 to 30 kilowatt PSUs, the ratio is 2x power leads to 5x content. So the thick content and growth is going to accelerate. So today what we are seeing is just the growth of the air and then next year we're going to see even an acceleration of GAN as power gets the dc, DC gets inside the rack. So I think what we are seeing here with the 50% is that the center is accelerating. I will also tell you even though we don't guide by market that what we see today for Q2 and as a reminder, we are confident in our guide for Q2. We're seeing that that AI infrastructure that grew 50% quarter Q4 to Q1 is actually going to grow faster. So that growth is going to accelerate throughout the area and that's before even the step up in context. So yes, I would say we are a bit ahead where I think we're going to be. I look at Q2 guide with confidence. The benefit of being high power is we have longer visibility. We used to be in mobile where you get you're still chasing orders within the quarter. I think the high power market in particularly data center and building infrastructure are giving us a much longer visibility. So I look at Q2 with confidence and we think as we said before, that this growth will continue throughout 26.
Jeremy
Awesome. Thank you both so much. The color was super helpful. One last follow up. Any update on the use of cash this year and next in support of the growth ramp and what are your thoughts on when cash flow break even is likely to occur? Thank you again.
Tonia Stevens
Yeah, so I'll take that one. And coming into Navitas and being new, when you look at the strength of our balance sheet and I even referenced that in my script, right, A very strong balance sheet. We have over 221 million in cash and no debt at the company. So that gives us a pretty long Runway to support our working capital needs. And Capex needs flexibility. So I'm confident we can execute the objectives and the organic Plan consistent with what I said in the script. So again, we remain focused on profitability and like Chris said, you know, we, we remain on track and maybe a little ahead of where we thought we would be to profitability. So we're, we're very focused on that. Nothing's changed in our thoughts around profitability and in fact, potentially accelerated a bit.
Chris Alexander
Jimmy, you can make the math right. I mean, At today's gross margin. Okay. And today's OpEx, it will take us to be in the high 30s from a revenue standpoint, to be profitable. Okay. Now we're guiding 10. Okay. For Q2, we said that we expect that growth to continue throughout the year. There is no reason to believe, based on what we just discussed, that the momentum that we are seeing in data center green infrastructure as well as the other hypermarket will slow down. So you can extrapolate that to when we're going to be profitable. I'm not going to get specific. Right. But I will tell you is when we look at our business, both Tonia, myself and the leadership team is getting to break even is a key objective. We're going to spend what we have to spend to optimize and to drive our growth. But being financially efficient and make sure that we get to breakeven at some point is a key priority for us.
Jeremy
Thank you.
Tina (Operator)
And your next question comes from the line of Quinn Bolton with Needham and company. Please go ahead.
Quinn Bolton
Hi, Chris and welcome. Tanya. Great to have you on board. I wanted to follow. Chris, you mentioned that at least on the 800 volt GaN opportunity, you've kind of moved from device level testing to board level testing. Kind of. Can you walk us through what the following steps would be to get to final production and sort of the timeline? If these higher power racks go to production, say second half of calendar 2027, when do you think those designs would be sort of fully locked down? Would that happen the end of this year or could that continue into 2027 in terms of the testing process?
Chris Alexander
Okay. So thank you, Quinn. You're very persistent asking me the same question every quarter. So I appreciate that. So nothing has changed, really. Right. So I would change the answer, as you said, depending if you're looking at the first phase of the 800 DC to the second phase. And again, for everybody to understand, the second phase is when the DC DC conversion gets inside the rack. Right. The big difference is in the first phase you're designing AC DC PSUs. DC DC PSUs. Right. So you're working with the hyperscalers, but really the implementation of that is at the merchant power ODM OEMs, okay. The delta, the flex powers, the vertip, the E tens and so on. Right. So as we are where we are with those guys, we first delivered the samples, both the 1.2 KV6 that we mentioned, the Gen 5 in the new package as well as the GATT devices, we now have delivered the final samples. Okay. Which I think is the samples that will get to production, which I think is important for those boards. We are, as I said, moving from component level testing to standard testing. What does it mean? Well, the customers have done a couple of prototypes. They are optimizing the systems, the layout, the EMI performance, the efficiency. We are highly active and supportive of this, okay. With our application engineers and our field application engineers. So that's kind of where we are. Right. So you know, the next step is once they've done some level of system testing, then they're going to do system reliability and system validation right at the, at the next level. So I would say for the first phase of the 800 DC, since this is meant to ramp at the end of the year to earlier next year, I mean we're going to get clarity very quickly. And as I told you before, for me, I'm not going to comment on designing and engagement with customers unless the customer wants so. But you're going to see the proof point in the backlog and as we grow right now, when it comes to the second phase, which is really driven by the hyperscales, when the DC DC conversion gets in the tray inside the rack, mostly with gan, because there's no other technology that helps you to do this 800 volt 50 or 800 volt 12, 800 volt 6 inside the rack. I think today we are still working with the hyperscalers and getting the ODM to be comfortable. Okay. One of the reason why we're spending so much time developing those reference boards that we've announced earlier this year, the 850 or the 860, is that it gives comfort to the hyperscalers and the customers on how to implement. So it's probably six to nine months behind. So if you ask me when we're going to get proof, point of the Intra Gan based DCD, probably Q1 to Q2 next year. Okay. But again, this is a duration, right? So you know, customers, what I see is I measure my team and the engagement with customers in terms of the number of samples we ship. You see 10 samples or 50 samples when you get to 5000 Sampers it's not sensors anymore. Okay. It's protobuilt. I measure my team on the amount of energy that the customer is spending on testing the technology and putting us in. From an apps point of view, it's all helping us. Right. And I see that energy, that momentum, that number of samples going up. So that's why I'm comfortable in the momentum we're building. However, as I said in the past, I think the proof is in the pudding. And we are not going to talk about pipeline, we're not going to talk about customer engagement unless the customer decides to. But we're going to refer to growth and outlook and guidance and backlog, which I think is what you'd expect in terms of success.
Quinn Bolton
Thanks for all that detail, Chris. I guess a follow up. Just longer term, do you guys have a view or are you seeing customers push the intermediate bus voltage to 48, 12 or 6 in that 800 to step down, do you think that 800 to 6 ultimately wins or do you think there's going to be a mix of different intermediate bus voltages across different hyperscaler platforms?
Chris Alexander
So in the first phase, as we talked about right at the end of the year, the bus bar stay at 50, right? I think you're referring to the True intra native 800 volt HVDC, right? Yes. At this point I would say it depends on the hyperscaler. I think you can see different flavors. You've seen that we announced at gtc at NGX with Nvidia and they are going to six. I think that's kind of one of the trend we see with that scale back to 12. Okay. It's a possibility some other hyperscalers might decide to stay at 50. Okay. So you might see some hyperscalers ramping next year with intra native 800 volt HVDC keeping 50 volts as a bus bar, but moving the DC DC conversion from top of rack to inside the rack. Right. So the short answer to your question is I think we're going to see multiple flavors directionally. I would say the trend is the same reduced number of conversion as you move to a higher density rack, which means that the secondary voltage is going to go down over time.
Quinn Bolton
Got it. Thank you, Chris. Thank you, Gwen.
Chris Alexander
With that, I will now turn the call back over to Chris Alexander for closing remarks. So thank you for joining us today. As I said early on, too early to declare victory, but what I see is the company is on track and accelerating the pivot and the transformation to Navitas 2.0. We have a lot of work to do still ahead of us. But if you look at our momentum in high power, the growth in high power, the growth in AI infrastructure which I mentioned quarter over quarter and the trend that we have ahead of us, I'm confident this will continue. But I want to close by thanking our teams, the Navitas team. It's a lot of work. This was a big pivot that we asked the team to go through moving from historical consumer low end mobile type of business to high power. It's a big shift in terms of geographical coverage and in terms of product mix. So I want to thank them for the effort, the reliance and the and the effort that they are putting into making that happen and of course our customers. Okay. That are supporting us as well. Thank you.
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