Shares of Navitas Semiconductor Corp (NVTS) experienced a sharp 13.47% decline in after-hours trading on Monday, following the release of its third-quarter earnings report and fourth-quarter guidance. The semiconductor company, which had seen impressive gains earlier in the year, faced a significant setback as investors reacted to disappointing financial results and a weak outlook.

Navitas reported third-quarter revenue of $10.11 million, slightly above analyst estimates of $10.01 million. However, this figure represented a substantial 53.4% year-over-year decline from $21.7 million in the same quarter last year. The company posted an adjusted loss of 5 cents per share, meeting analyst expectations but showing no improvement from the previous year. Moreover, Navitas reported a quarterly loss of $19.23 million, highlighting ongoing profitability challenges.

Adding to investor concerns, Navitas provided weak guidance for the fourth quarter, projecting revenue between $6.75 million and $7.25 million. This forecast falls significantly short of analyst estimates of $10.05 million. The company attributed the soft guidance to its strategic decision to deprioritize its low-power, lower-profit China mobile and consumer business, and streamline its distribution network to focus on higher-power revenue and customers.

Despite the negative market reaction, Navitas' CEO Chris Allexandre remained optimistic about the company's future, citing accelerating demand across high-power semiconductor markets for AI data centers, performance computing, energy and grid infrastructure, and industrial electrification. Allexandre emphasized Navitas' technology leadership in gallium nitride (GaN) and high-voltage silicon carbide (SiC) as key advantages in capitalizing on global megatrends. However, the market's response suggests that investors may require more concrete evidence of the company's ability to translate these opportunities into improved financial performance in the near term.