Power Integrations Reports Fourth-Quarter and Full-Year Financial Results

Power Integrations Reports Fourth-Quarter and Full-Year Financial Results 02/05/2026 Full-year revenue increased six percent to $443.5 million; cash flow from operations was $111.5 million Announces workforce reduction and related restructuring charge Power Integrations (NASDAQ: POWI) today announced financial results for the quarter and year ended December 31, 2025. Net revenue for the fourth quarter was $103.2 million, down 13 percent from the prior quarter and down two percent from the fourth quarter of 2024. GAAP net income for the fourth quarter was $13.3 million or $0.24 per diluted share compared to a net loss of $0.02 per diluted share in the prior quarter and net income of $0.16 per diluted share in the fourth quarter of 2024. Cash flow from operations for the fourth quarter was $26.2 million. For the full year 2025, net revenue was $443.5 million, up six percent compared to the prior year. GAAP net income was $22.1 million or $0.39 per diluted share compared to $0.56 per diluted share in the prior year. Cash flow from operations for the year was $111.5 million. In addition to its GAAP results, the company provided non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets, expenses related to an employment-litigation matter, and the tax effects of these items. Non-GAAP net income for the fourth quarter of 2025 was $12.7 million or $0.23 per diluted share compared to $0.36 per diluted share in the prior quarter and $0.30 per diluted share in the fourth quarter of 2024. Full-year non-GAAP net income was $70.7 million or $1.25 per diluted share compared to $1.16 per diluted share in the prior year. A reconciliation of GAAP to non-GAAP financial results and outlook is included with the tables accompanying this press release. Power Integrations also today announced that it has carried out a restructuring plan, reducing its global workforce by seven percent. The company expects to incur a charge of between $3.5 million and $4.0 million in the first quarter of 2026 associated with severance benefits and related expenses. Power Integrations CEO Jen Lloyd commented: “I am pleased that we returned to growth in 2025 with a six-percent increase in total revenue, led by our industrial category which grew 15 percent. The growth in industrial was driven by record sales in our high-power gate-driver business, plus strength in metering, power tools, automotive and broad-based industrial applications. Additionally, total revenue from PowiGaN™ products grew more than 40 percent for the year.” Dr. Lloyd continued: “Our addressable market continues to expand as AI data centers, electrification, grid modernization and other macro trends drive demand for innovative high-voltage technologies. We are taking steps to align our organization with these opportunities, including a restructuring of our workforce to better align expenses with revenue and create flexibility to invest in the products, people, and markets we expect to drive long-term growth and profitability.” Financial Outlook / Dividend The company issued the following forecast for the first quarter of 2026: Revenue is expected to be in a range of $104 million to $109 million.GAAP gross margin is expected to be between 52 percent and 53 percent, and non-GAAP gross margin is expected to be between 53 percent and 54 percent.GAAP operating expenses are expected to be between $54 million and $55.5 million, and non-GAAP operating expenses are expected to be $46 million plus or minus $0.5 million.The company paid a dividend of $0.21 per share on December 31, 2025. A dividend of $0.215 per share will be paid on March 31, 2026, to stockholders of record as of February 27, 2026. Conference Call Today at 1:30 p.m. Pacific Time Power Integrations management will hold a conference call today at 1:30 p.m. Pacific time. A webcast of the call will be available on the company's investor web page, http://investors.power.com. About Power Integrations Power Integrations, Inc. is a leading innovator in semiconductor technologies for high-voltage power conversion. The company’s products are key building blocks in the clean-power ecosystem, enabling the generation of renewable energy as well as the efficient transmission and consumption of power in applications ranging from milliwatts to megawatts. For more information, please visit www.power.com. Note Regarding Use of Non-GAAP Financial Measures In addition to the company's consolidated financial statements, which are presented according to GAAP, the company provides certain non-GAAP financial information that excludes stock-based compensation expenses recorded under ASC 718-10, amortization of acquisition-related intangible assets, expenses stemming from an employment litigation matter and the tax effects of these items. The company uses these measures in its financial and operational decision-making and, with respect to one measure, in setting performance targets for compensation purposes. The company believes that these non-GAAP measures offer important analytical tools to help investors understand its operating results, and to facilitate comparability with the results of companies that provide similar measures. Non-GAAP measures have limitations as analytical tools and are not meant to be considered in isolation or as a substitute for GAAP financial information. For example, stock-based compensation is an important component of the company’s compensation mix and will continue to result in significant expenses in the company’s GAAP results for the foreseeable future but is not reflected in the non-GAAP measures. Also, other companies, including companies in Power Integrations’ industry, may calculate non-GAAP measures differently, limiting their usefulness as comparative measures. Reconciliations of non-GAAP measures to GAAP measures are attached to this press release. Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or the company’s future financial or operating performance. In some cases, you can identify forward looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates,” “going to,” "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern the company expectations, strategy, priorities, plans or intentions. Forward-looking statements in this release include, but are not limited to, the company’s restructuring plans and anticipated charges, the company’s guidance and outlook for the first quarter of 2026, and the trends and assumptions underlying such guidance and outlook, and the company’s expectations regarding its upcoming dividend, including the timing and amount of such dividend. The company’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including the company’s ability to forecast its performance; changes in trade policies, in particular the escalation and imposition of new and higher tariffs, which could reduce demand for end products that incorporate our integrated circuits and/or place pressure on our prices as our customers seek to offset the impact of increased tariffs on their own products; the company’s ability to supply products and its ability to conduct other aspects of its business, such as competing for new design wins; changes in global economic and geopolitical conditions, including such factors as inflation, armed conflicts and trade negotiations, which may impact the level of demand for the company’s products; potential changes and shifts in customer demand away from end products that utilize the company's integrated circuits to end products that do not incorporate the company's products; the effects of competition, which may cause the company’s revenue to decrease or cause the company to decrease its selling prices for its products; unforeseen costs and expenses; and unfavorable fluctuations in component costs or operating expenses resulting from changes in commodity prices and/or exchange rates; and product development delays and defects and market acceptance of the new products. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in the company’s filings with the Securities and Exchange Commission (“SEC”), including the company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 7, 2025 and subsequent Quarterly Reports on Form 10-Q filed with the SEC. The forward-looking statements in this release are based on information available to the company as of the date hereof and the company disclaims any obligation to update or alter its forward-looking statements, except as otherwise required by law. Power Integrations, PowiGaN and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc. All other trademarks are property of their respective owners. POWER INTEGRATIONS, INC.CONSOLIDATED STATEMENTS OF INCOME (LOSS)(in thousands, except per-share amounts)Three Months EndedTwelve Months EndedDecember 31, 2025September 30, 2025December 31, 2024December 31, 2025December 31, 2024NET REVENUE $ 103,204 $ 118,919 $ 105,250 $ 443,504 $ 418,973 COST OF REVENUE 48,595 54,068 47,983 201,855 194,222 GROSS PROFIT 54,609 64,851 57,267 241,649 224,751 OPERATING EXPENSES:Research and development 24,334 26,696 25,689 101,116 100,790 Sales and marketing 15,773 17,455 16,931 67,952 67,825 General and administrative 9,472 10,374 10,728 42,701 38,207 Other operating expenses (3,744 ) 14,279 - 19,686 - Total operating expenses 45,835 68,804 53,348 231,455 206,822 INCOME (LOSS) FROM OPERATIONS 8,774 (3,953 ) 3,919 10,194 17,929 OTHER INCOME 2,373 2,555 3,384 10,785 12,825 INCOME (LOSS) BEFORE INCOME TAXES 11,147 (1,398 ) 7,303 20,979 30,754 PROVISION (BENEFIT) FOR INCOME TAXES (2,143 ) (42 ) (1,837 ) (1,114 ) (1,480 ) NET INCOME (LOSS) $ 13,290 $ (1,356 ) $ 9,140 $ 22,093 $ 32,234 EARNINGS (LOSS) PER SHARE:Basic $ 0.24 $ (0.02 ) $ 0.16 $ 0.39 $ 0.57 Diluted $ 0.24 $ (0.02 ) $ 0.16 $ 0.39 $ 0.56 SHARES USED IN PER-SHARE CALCULATION:Basic 55,329 55,796 56,848 56,063 56,820 Diluted 55,694 55,796 57,097 56,324 57,130 SUPPLEMENTAL INFORMATION:Three Months EndedTwelve Months EndedDecember 31, 2025September 30, 2025December 31, 2024December 31, 2025December 31, 2024Stock-based compensation expenses included in:Cost of revenue $ 232 $ 517 $ 541 $ 1,998 $ 2,090 Research and development 1,945 2,850 3,280 10,235 12,587 Sales and marketing 1,042 1,910 2,074 6,460 8,064 General and administrative 1,626 2,374 3,394 12,563 12,335 Other operating expenses (5,120 ) 13,554 - 8,434 - Total stock-based compensation expense $ (275 ) $ 21,205 $ 9,289 $ 39,690 $ 35,076 Cost of revenue includes:Amortization of acquisition-related intangible assets $ 147 $ 147 $ 147 $ 587 $ 1,034 Three Months EndedTwelve Months EndedREVENUE MIX BY END MARKETDecember 31, 2025September 30, 2025December 31, 2024December 31, 2025December 31, 2024Communications 15 % 11 % 13 % 12 % 12 % Computer 14 % 13 % 15 % 13 % 14 % Consumer 34 % 34 % 37 % 37 % 39 % Industrial 37 % 42 % 35 % 38 % 35 % POWER INTEGRATIONS, INC.RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS(in thousands, except per-share amounts)Three Months EndedTwelve Months EndedDecember 31, 2025September 30, 2025December 31, 2024December 31, 2025December 31, 2024RECONCILIATION OF GROSS PROFITGAAP gross profit $ 54,609 $ 64,851 $ 57,267 $ 241,649 $ 224,751 GAAP gross margin 52.9 % 54.5 % 54.4 % 54.5 % 53.6 % Stock-based compensation included in cost of revenue 232 517 541 1,998 2,090 Amortization of acquisition-related intangible assets 147 147 147 587 1,034 Non-GAAP gross profit $ 54,988 $ 65,515 $ 57,955 $ 244,234 $ 227,875 Non-GAAP gross margin 53.3 % 55.1 % 55.1 % 55.1 % 54.4 % Three Months EndedTwelve Months EndedRECONCILIATION OF OPERATING EXPENSESDecember 31, 2025September 30, 2025December 31, 2024December 31, 2025December 31, 2024GAAP operating expenses $ 45,835 $ 68,804 $ 53,348 $ 231,455 $ 206,822 Less:Stock-based compensation expense included in operating expensesResearch and development 1,945 2,850 3,280 10,235 12,587 Sales and marketing 1,042 1,910 2,074 6,460 8,064 General and administrative 1,626 2,374 3,394 12,563 12,335 Other operating expenses (5,120 ) 13,554 - 8,434 - Other operating expenses 1,376 725 - 11,252 - Total 869 21,413 8,748 48,944 32,986 Non-GAAP operating expenses $ 44,966 $ 47,391 $ 44,600 $ 182,511 $ 173,836 Three Months EndedTwelve Months EndedRECONCILIATION OF INCOME (LOSS) FROM OPERATIONSDecember 31, 2025September 30, 2025December 31, 2024December 31, 2025December 31, 2024GAAP income (loss) from operations $ 8,774 $ (3,953 ) $ 3,919 $ 10,194 $ 17,929 GAAP operating margin 8.5 % -3.3 % 3.7 % 2.3 % 4.3 % Add:Total stock-based compensation (275 ) 21,205 9,289 39,690 35,076 Amortization of acquisition-related intangible assets 147 147 147 587 1,034 Other operating expenses 1,376 725 - 11,252 - Non-GAAP income from operations $ 10,022 $ 18,124 $ 13,355 $ 61,723 $ 54,039 Non-GAAP operating margin 9.7 % 15.2 % 12.7 % 13.9 % 12.9 % Three Months EndedTwelve Months EndedRECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXESDecember 31, 2025September 30, 2025December 31, 2024December 31, 2025December 31, 2024GAAP provision (benefit) for income taxes $ (2,143 ) $ (42 ) $ (1,837 ) $ (1,114 ) $ (1,480 ) GAAP effective tax rate -19.2 % -3.0 % -25.2 % -5.3 % -4.8 % Tax effect of adjustments to GAAP results (1,806 ) (527 ) (1,366 ) (2,965 ) (2,153 ) Non-GAAP provision (benefit) for income taxes $ (337 ) $ 485 $ (471 ) $ 1,851 $ 673 Non-GAAP effective tax rate -2.7 % 2.3 % -2.8 % 2.6 % 1.0 % Three Months EndedTwelve Months EndedRECONCILIATION OF NET INCOME (LOSS) PER SHARE (DILUTED)December 31, 2025September 30, 2025December 31, 2024December 31, 2025December 31, 2024GAAP net income (loss) $ 13,290 $ (1,356 ) $ 9,140 $ 22,093 $ 32,234 Adjustments to GAAP net income (loss)Stock-based compensation (275 ) 21,205 9,289 39,690 35,076 Amortization of acquisition-related intangible assets 147 147 147 587 1,034 Other operating expenses 1,376 725 - 11,252 - Tax effect of items excluded from non-GAAP results (1,806 ) (527 ) (1,366 ) (2,965 ) (2,153 ) Non-GAAP net income $ 12,732 $ 20,194 $ 17,210 $ 70,657 $ 66,191 Average shares outstanding for calculationof non-GAAP net income per share (diluted) 55,694 56,162 57,097 56,324 57,130 Non-GAAP net income per share (diluted) $ 0.23 $ 0.36 $ 0.30 $ 1.25 $ 1.16 GAAP net income (loss) per share (diluted) $ 0.24 $ (0.02 ) $ 0.16 $ 0.39 $ 0.56 Twelve Months Ended RECONCILIATION OF FREE CASH FLOWDecember 31, 2025Cash flow from operations $ 111,518 Purchases of property and equipment (24,396 ) Free cash flow $ 87,122 POWER INTEGRATIONS, INC.RECONCILIATION OF NON-GAAP MEASURES TO GAAP IN FIRST-QUARTER 2026 FORECAST(dollar amounts in millions)RECONCILIATION OF GROSS MARGIN FORECASTLOWHIGHGAAP gross margin forecast 52.0 % 53.0 % Adjustments to reconcile GAAP to non-GAAPStock-based compensation included in cost of revenue 0.6 % 0.6 % Amortization of acquisition-related intangible assets 0.1 % 0.1 % Restructuring charge 0.3 % 0.3 % Non-GAAP gross margin forecast 53.0 % 54.0 % RECONCILIATION OF OPERATING EXPENSE FORECASTLOWHIGHGAAP operating-expense forecast $ 54.0 $ 55.5 Adjustments to reconcile GAAP to non-GAAPStock-based compensation (5.3 ) (5.3 ) Restructuring charge (3.2 ) (3.7 ) Non-GAAP operating-expense forecast $ 45.5 $ 46.5 POWER INTEGRATIONS, INC.CONSOLIDATED BALANCE SHEETS(in thousands)December 31, 2025September 30, 2025December 31, 2024ASSETSCURRENT ASSETS:Cash and cash equivalents $ 58,755 $ 48,646 $ 50,972 Short-term marketable securities 190,755 193,214 249,023 Accounts receivable, net 18,254 31,515 27,172 Inventories 166,887 164,618 165,612 Prepaid expenses and other current assets 23,678 18,070 21,260 Total current assets 458,329 456,063 514,039 PROPERTY AND EQUIPMENT, net 146,536 147,915 149,562 INTANGIBLE ASSETS, net 7,244 7,452 8,075 GOODWILL 95,271 95,271 95,271 DEFERRED TAX ASSETS 35,594 37,125 36,485 OTHER ASSETS 29,233 28,704 25,394 Total assets $ 772,207 $ 772,530 $ 828,826 LIABILITIES AND STOCKHOLDERS’ EQUITYCURRENT LIABILITIES:Accounts payable $ 33,963 $ 37,459 $ 29,789 Accrued payroll and related expenses 13,840 14,233 13,987 Taxes payable 962 890 961 Other accrued liabilities 21,596 18,513 10,580 Total current liabilities 70,361 71,095 55,317 LONG-TERM LIABILITIES:Income taxes payable 3,663 4,556 3,871 Other liabilities 25,338 24,903 19,866 Total liabilities 99,362 100,554 79,054 STOCKHOLDERS' EQUITY:Common stock 20 20 22 Additional paid-in capital - - 18,734 Accumulated other comprehensive loss (1,105 ) (1,262 ) (3,023 ) Retained earnings 673,930 673,218 734,039 Total stockholders' equity 672,845 671,976 749,772 Total liabilities and stockholders' equity $ 772,207 $ 772,530 $ 828,826 POWER INTEGRATIONS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)Three Months EndedTwelve Months EndedDecember 31, 2025September 30, 2025December 31, 2024December 31, 2025December 31, 2024CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss) $ 13,290 $ (1,356 ) $ 9,140 $ 22,093 $ 32,234 Adjustments to reconcile net income (loss) to cash provided by operating activities:Depreciation 6,407 6,542 7,743 27,195 33,303 Amortization of intangible assets 208 208 208 831 1,279 Loss (gain) on disposal of property and equipment - (108 ) 24 (108 ) 240 Stock-based compensation expense (275 ) 21,205 9,289 39,690 35,076 Accretion of discount on marketable securities (216 ) (198 ) (385 ) (1,135 ) (1,637 ) Deferred income taxes 1,759 (7 ) 336 898 (8,352 ) Increase (decrease) in accounts receivable allowance for credit losses 39 - 214 (342 ) (245 ) Change in operating assets and liabilities:Accounts receivable 13,222 (3,932 ) (10,752 ) 9,260 (12,253 ) Inventories (2,269 ) 3,778 2,068 (1,275 ) (2,448 ) Prepaid expenses and other assets (4,566 ) (1,204 ) (1,613 ) 635 4,001 Accounts payable (2,762 ) 5,767 1,540 3,253 3,454 Taxes payable and other accrued liabilities 1,369 (841 ) (3,086 ) 10,523 (3,471 ) Net cash provided by operating activities 26,206 29,854 14,726 111,518 81,181 CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment (7,050 ) (5,694 ) (3,045 ) (24,396 ) (17,286 ) Proceeds from sale of property and equipment - 150 - 150 - Purchases of marketable securities (5,709 ) (11,079 ) (8,135 ) (64,484 ) (105,716 ) Proceeds from sales and maturities of marketable securities 8,279 20,166 2,796 124,937 106,602 Payment for acquisition, net of cash acquired - - - - (9,520 ) Net cash provided by (used in) investing activities (4,480 ) 3,543 (8,384 ) 36,207 (25,920 ) CASH FLOWS FROM FINANCING ACTIVITIES:Net proceeds from issuance of common stock - 2,539 - 5,326 5,700 Repurchase of common stock - (42,440 ) (1,902 ) (98,098 ) (27,881 ) Payments of dividends to stockholders (11,617 ) (11,785 ) (11,937 ) (47,170 ) (46,037 ) Proceeds from draw on line of credit - - - 13,000 - Payments on line of credit - - - (13,000 ) - Net cash used in financing activities (11,617 ) (51,686 ) (13,839 ) (139,942 ) (68,218 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 10,109 (18,289 ) (7,497 ) 7,783 (12,957 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 48,646 66,935 58,469 50,972 63,929 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 58,755 $ 48,646 $ 50,972 $ 58,755 $ 50,972 Joe Shiffler Power Integrations, Inc. (408) 414-8528 [email protected] Source: Power Integrations, Inc.