Navitas CEO Sketches Breakeven Math: 'Low 60s' Revenue If Margins Pass 50%
Chris Allexandre tied breakeven to a margin jump from Claros and costs growing slower than sales, with fourth-quarter spending guided to $25.0 million.
Navitas Semiconductor, which designs gallium nitride and silicon carbide power chips, has a breakeven model: CEO Chris Allexandre said on the company's third-quarter earnings call Tuesday that operating costs "in the low 30s" and a 50% gross margin would put breakeven "around the low 60s." He gave no units on the call, and the model assumes the Claros chip technology the company just bought lifts its blended margin past 50%.
The breakeven arithmetic
Asked by an analyst at Craig-Hallum for a breakeven framework, Allexandre said to take fourth-quarter operating expenses, multiply by four, and raise the total by less than revenue grows. That lands in the low 30s, he said.
Organic gains should add "a couple of points" over time to the current 40.0% adjusted gross margin, he said. Once the Claros integrated voltage regulator (IVR) technology is in the mix, he said, "it's not inconceivable" that the blended margin goes "north of 50%."
Third-quarter revenue was $14.0 million, up 33% from the second quarter and 38% from a year earlier. Adjusted operating expenses were $16.5 million and the operating loss was $10.9 million.
A $25 million spending step-up
CFO Tonya Stevens guided fourth-quarter adjusted operating expenses to $25.0 million, plus or minus $1 million, including Claros overhead. Revenue guidance is $16.0 million, plus or minus $0.5 million, and gross margin guidance is 40.5%, plus or minus 100 basis points (one percentage point).
After that step-up, Stevens said, spending should grow as a fraction of revenue growth in 2027, though she said management is not giving a full-year figure. Allexandre said profitability will come from scale and gross margin expansion.
For 2027, he said the company has modeled AI infrastructure revenue to more than triple, with everything else roughly flat.
Claros and a cash cushion
Navitas closed the Claros deal on October 6, paying about $126 million in cash. Stevens said pro forma cash after that payment is about $405 million, against $531.5 million at the end of the third quarter, and that the company has no debt. It did not draw on its at-the-market stock-sale facility in the quarter.
The company spent the past year exiting mobile and low-end consumer chips. Allexandre said mobile revenue should be effectively gone by the fourth quarter, with AI infrastructure above 40% of revenue. Stevens said the company ended the quarter with a book-to-bill ratio, orders against shipments, well above one and backlog extending into mid-2027.
The next test comes with fourth-quarter results: operating expenses against the $25.0 million guided and gross margin against the 40.5% midpoint.
