Navitas Semiconductor Corp (NVTS) Cash Flow Statement

The OCF/NI ratio of 0.14 in 2026Q2 is the lowest in the series, but the gap is driven by a non-operating charge likely related to impairments or fair value adjustments, not core operations. Excluding that quarter, OCF/NI ratios range from 0.23 to 0.80, indicating that operating losses are consistently larger than cash burn, partly due to stock-based compensation and depreciation. Investors should monitor whether such non-cash charges recur, as they distort the true cash-generating ability of the business.

The FCF margin improved from -194.8% in 2026Q1 to -3.1% in 2026Q2, but this is largely due to a one-time revenue spike and a non-cash charge inflating the denominator. Over the trailing ten quarters, FCF has been consistently negative, with cumulative FCF of approximately -$159M against cumulative net income of -$463M, indicating that cash burn is structurally tied to operating losses. The trajectory suggests that even with management's guidance for double-digit growth, the company remains far from FCF breakeven, and the market's valuation implies a speculative bet on future profitability.

The low CapEx suggests that the company's asset-light model does not require significant fixed investment, but it also means that growth is dependent on external foundries and packaging partners. The slight uptick in CapEx in early 2024 may indicate investment in test or qualification equipment, but the overall trend is minimal. This implies that the primary cash drain is operating expenses, particularly R&D and SG&A, rather than capital expansion, and that any future scaling will likely require increased working capital rather than fixed asset purchases.

The positive working capital changes in 2025Q4 and 2024Q4 suggest that the company was collecting receivables or reducing inventory, while the negative changes in 2026Q2 and 2026Q1 indicate a build-up in inventory or slower collections. Given the revenue decline and the company's exposure to consumer electronics, these swings could be a sign of channel stuffing or demand softness. Investors should monitor inventory levels and days sales outstanding, as a sustained negative working capital trend could indicate deteriorating liquidity.

The absence of capital returns is typical for a pre-profit company, but the cash balance provides a limited runway given the current burn rate of roughly $30M per quarter in operating and investing activities. The GeneSiC acquisition appears to have been completed in a prior period, with no significant cash outflows in the last ten quarters. This suggests that management is prioritizing liquidity to weather the downturn, but the persistent negative cash flow implies that additional dilution or debt may be necessary if the revenue recovery stalls.

The large cumulative gap between net income and operating cash flow indicates that a significant portion of reported losses are non-cash, such as goodwill impairments or fair value adjustments. This does not diminish the severity of the cash burn, but it suggests that the company's cash consumption is lower than the accounting losses imply. However, the persistent negative operating cash flow across all quarters indicates that the underlying business is not generating cash, and the divergence may narrow if non-cash charges are one-time in nature. Investors should focus on the cash burn rate as the more reliable indicator of sustainability.