Power Integrations Reports First-Quarter Financial Results

Power Integrations Reports First-Quarter Financial Results 05/07/2026 Revenue increased three percent year-over-year to $108.3 million; cash flow from operations was $20.0 million Power Integrations (NASDAQ: POWI) today announced financial results for the quarter ended March 31, 2026. Net revenue for the first quarter was $108.3 million, up five percent from the prior quarter and up three percent from the first quarter of 2025. GAAP net income for the first quarter was $3.3 million or $0.06 per diluted share compared to $0.24 per diluted share in the prior quarter and $0.15 per diluted share in the first quarter of 2025. Cash flow from operations for the first quarter was $20.0 million. In addition to its GAAP results, the company provided non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets, a restructuring charge associated with previously announced workforce reductions and the tax effects of these items. Non-GAAP net income for the first quarter of 2026 was $13.9 million or $0.25 per diluted share compared to $0.23 per diluted share in the prior quarter and $0.31 per diluted share in the first quarter of 2025. A reconciliation of GAAP to non-GAAP financial results and outlook is included with the tables accompanying this press release. Power Integrations CEO Jen Lloyd commented: “Q1 was a good quarter for Power Integrations as we saw improved market demand while remaining focused on delivering innovative solutions based on our customers’ needs. Our industrial revenue grew 23 percent year-over-year driven by a breadth of applications including renewable energy, battery storage, home automation and automotive.” Dr. Lloyd continued: “The momentum in our industrial business reflects our strategic focus on markets where our high-voltage technologies help customers solve the most pressing challenges in power. We continue to see confirmation that EVs and AI data centers not only need innovative solutions like our PowiGaN™ technology but also—by increasing pressure on the power grid—drive growth in renewables, battery storage and DC transmission, where our gate‑driver products excel. We are orienting our strategy and our R&D pipeline around these highly attractive opportunities.” Power Integrations paid a dividend of $0.215 per share on March 31, 2026. A dividend of $0.215 per share will be paid on June 30, 2026, to stockholders of record as of May 29, 2026. Financial Outlook The company issued the following forecast for the second quarter of 2026: Revenue is expected to be in a range of $115 million to $120 million.GAAP gross margin is expected to be between 53.5 percent and 54.5 percent, and non-GAAP gross margin is expected to be between 54 percent and 55 percent.GAAP operating expenses are expected to be between $55 million and $56 million, and non-GAAP operating expenses are expected to be between $46.5 million and $47.5 million.GAAP operating margin is expected to be between 5.5 percent and 7.5 percent. Non-GAAP operating margin is expected to be between 13.5 percent and 15.5 percent. Conference Call Information and Supplemental Materials Power Integrations management will hold a conference call today at 1:30 p.m. Pacific time. A live webcast of the call will be available on the company's investor web page, http://investors.power.com, along with supplemental materials related to today’s earnings release. 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, a restructuring charge associated with workforce reductions implemented in the first quarter, and the tax effects of these items. The company uses these measures in its financial and operational decision-making and, with respect to non-GAAP operating income, 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’s expectations, strategy, priorities, plans or intentions. Forward-looking statements in this release include, but are not limited to, the company’s guidance and outlook for the second quarter of 2026, 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 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 (Unaudited)(in thousands, except per-share amounts)Three Months EndedMarch 31, 2026December 31, 2025March 31, 2025Net revenue $ 108,308 $ 103,204 $ 105,529 Cost of revenue 51,370 48,595 47,294 Gross profit 56,938 54,609 58,235 Operating expenses:Research and development 26,255 24,334 24,095 Selling, general and administrative 24,444 25,245 27,422 Other operating expenses (1,419 ) (3,744 ) - Restructuring and related charges 6,204 - - Total operating expenses 55,484 45,835 51,517 Income from operations 1,454 8,774 6,718 Other income 2,466 2,373 3,167 Income before income taxes 3,920 11,147 9,885 Provision (benefit) for income taxes 620 (2,143 ) 1,095 NET INCOME $ 3,300 $ 13,290 $ 8,790 Earnings per share:Basic $ 0.06 $ 0.24 $ 0.15 Diluted $ 0.06 $ 0.24 $ 0.15 Shares used in per share calculation:Basic 55,506 55,329 56,871 Diluted 55,874 55,694 57,123 SUPPLEMENTAL INFORMATION:Three Months EndedMarch 31, 2026December 31, 2025March 31, 2025Stock-based compensation expenses included in:Cost of revenue $ 469 $ 232 $ 657 Research and development 1,904 1,945 2,250 Selling,general and administrative 3,526 2,668 5,776 Other operating expenses (1,419 ) (5,120 ) - Restructuring and related charges 1,827 - - Total stock-based compensation expense $ 6,307 $ (275 ) $ 8,683 Cost of revenue includes:Amortization of acquisition-related intangible assets $ 147 $ 147 $ 147 Three Months EndedRevenue mix by end market:March 31, 2026December 31, 2025March 31, 2025Communications 10 % 15 % 10 % Computer 11 % 14 % 12 % Consumer 38 % 34 % 44 % Industrial 41 % 37 % 34 % POWER INTEGRATIONS, INC.RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS (Unaudited)(in thousands, except per-share amounts)Three Months EndedMarch 31, 2026December 31, 2025March 31, 2025RECONCILIATION OF GROSS PROFITGAAP gross profit $ 56,938 $ 54,609 $ 58,235 GAAP gross margin 52.6 % 52.9 % 55.2 % Stock-based compensation included in cost of revenue 469 232 657 Amortization of acquisition-related intangible assets 147 147 147 Restructuring and related charges in cost of revenue 365 - - Non-GAAP gross profit $ 57,919 $ 54,988 $ 59,039 Non-GAAP gross margin 53.5 % 53.3 % 55.9 % Three Months EndedRECONCILIATION OF OPERATING EXPENSESMarch 31, 2026December 31, 2025March 31, 2025GAAP operating expenses $ 55,484 $ 45,835 $ 51,517 Less:Stock-based compensation expense included in operating expensesResearch and development 1,904 1,945 2,250 Selling, general and administrative 3,526 2,668 5,776 Other operating expenses (1,419 ) (5,120 ) - Other operating expenses - 1,376 - Total 4,011 869 8,026 Less:Restructuring and related charges 6,204 - - Non-GAAP operating expenses $ 45,269 $ 44,966 $ 43,491 Three Months EndedRECONCILIATION OF INCOME FROM OPERATIONSMarch 31, 2026December 31, 2025March 31, 2025GAAP income from operations $ 1,454 $ 8,774 $ 6,718 GAAP operating margin 1.3 % 8.5 % 6.4 % Add:Total stock-based compensation unrelated to restructuring 4,480 (275 ) 8,683 Amortization of acquisition-related intangible assets 147 147 147 Other operating expenses - 1,376 - Restructuring and related charges 6,569 - - Non-GAAP income from operations $ 12,650 $ 10,022 $ 15,548 Non-GAAP operating margin 11.7 % 9.7 % 14.7 % Three Months EndedRECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXESMarch 31, 2026December 31, 2025March 31, 2025GAAP provision (benefit) for income taxes $ 620 $ (2,143 ) $ 1,095 GAAP effective tax rate 15.8 % 19.2 % 11.1 % Tax effect of adjustments to GAAP results (611 ) (1,806 ) 239 Non-GAAP provision (benefit) for income taxes $ 1,231 $ (337 ) $ 856 Non-GAAP effective tax rate 8.1 % -2.7 % 4.6 % Three Months EndedRECONCILIATION OF NET INCOME PER SHARE (DILUTED)March 31, 2026December 31, 2025March 31, 2025GAAP net income $ 3,300 $ 13,290 $ 8,790 Adjustments to GAAP net incomeTotal stock-based compensation unrelated to restructuring 4,480 (275 ) 8,683 Amortization of acquisition-related intangible assets 147 147 147 Other operating expenses - 1,376 - Tax effect of items excluded from non-GAAP results (611 ) (1,806 ) 239 Restructuring and related charges 6,569 - - Non-GAAP net income $ 13,885 $ 12,732 $ 17,859 Average shares outstanding for calculationof non-GAAP net income per share (diluted) 55,874 55,694 57,123 GAAP net income per share (diluted) $ 0.06 $ 0.24 $ 0.15 Non-GAAP net income per share (diluted) $ 0.25 $ 0.23 $ 0.31 Three Months Ended RECONCILIATION OF FREE CASH FLOWMarch 31, 2026Cash flow from operations $ 20,045 Purchases of property and equipment (1,998 ) Free cash flow $ 18,047 POWER INTEGRATIONS, INC.CONSOLIDATED BALANCE SHEETS (Unaudited)(in thousands)March 31, 2026December 31, 2025ASSETSCurrent assets:Cash and cash equivalents $ 63,390 $ 58,755 Short-term investments 193,814 190,755 Accounts receivable, net 14,407 18,254 Inventories 162,982 166,887 Prepaid expenses and other current assets 23,747 23,678 Total current assets 458,340 458,329 Property and equipment, net 143,630 146,536 Intangible assets, net 7,061 7,244 Goodwill 95,271 95,271 Other non-current assets 66,385 64,827 TOTAL ASSETS $ 770,687 $ 772,207 LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilities:Accounts payable $ 31,407 $ 33,963 Accrued payroll and related expenses 13,224 13,840 Other accrued liabilities 21,958 22,558 Total current liabilities 66,589 70,361 Long-term liabilities:Other liabilities 32,292 29,001 TOTAL LIABILITIES 98,881 99,362 STOCKHOLDERS' EQUITY:Common stock 20 20 Additional paid-in capital 8,997 - Accumulated other comprehensive loss (2,491 ) (1,105 ) Retained earnings 665,280 673,930 TOTAL STOCKHOLDERS' EQUITY 671,806 672,845 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 770,687 $ 772,207 POWER INTEGRATIONS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(in thousands)Three Months EndedMarch 31, 2026December 31, 2025March 31, 2025CASH FLOWS FROM OPERATING ACTIVITIES:Net income $ 3,300 $ 13,290 $ 8,790 Adjustments to reconcile net income to cash provided by operating activities:Depreciation 6,380 6,407 7,244 Amortization of intangibles 183 208 207 Loss on disposal of property and equipment 49 - - Stock-based compensation expense 6,307 (275 ) 8,683 Accretion of discount on investments (156 ) (216 ) (346 ) Increase (decrease) in accounts receivable allowance for credit losses - 39 (381 ) Change in operating assets and liabilities:Accounts receivable 3,847 13,222 4,747 Inventories 3,905 (2,269 ) (3,456 ) Prepaid expenses and other assets 3,414 (2,807 ) 832 Accounts payable (4,072 ) (2,762 ) 4,002 Other accrued liabilities (3,112 ) 1,369 (3,936 ) NET CASH PROVIDED BY OPERATING ACTIVITIES 20,045 26,206 26,386 CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment (1,998 ) (7,050 ) (5,726 ) Purchases of investments (14,807 ) (5,709 ) (5,630 ) Proceeds from sales and maturities of investments 10,655 8,279 15,882 NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (6,150 ) (4,480 ) 4,526 CASH FLOWS FROM FINANCING ACTIVITIES:Issuance of common stock under employee stock plans 2,690 - 2,787 Repurchase of common stock - - (23,098 ) Payments of dividends to stockholders (11,950 ) (11,617 ) (11,959 ) NET CASH USED IN FINANCING ACTIVITIES (9,260 ) (11,617 ) (32,270 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,635 10,109 (1,358 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 58,755 48,646 50,972 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 63,390 $ 58,755 $ 49,614 POWER INTEGRATIONS, INC.RECONCILIATION OF NON-GAAP MEASURES TO GAAP IN SECOND-QUARTER 2026 FORECAST(dollar amounts in millions)RECONCILIATION OF GROSS MARGIN FORECASTLOWHIGHGAAP gross margin forecast 53.5 % 54.5 % Adjustments to reconcile GAAP to non-GAAPStock-based compensation included in cost of revenue 0.4 % 0.4 % Amortization of acquisition-related intangible assets 0.1 % 0.1 % Non-GAAP gross margin forecast 54.0 % 55.0 % RECONCILIATION OF OPERATING EXPENSE FORECASTLOWHIGHGAAP operating-expense forecast $ 55.0 $ 56.0 Adjustments to reconcile GAAP to non-GAAPStock-based compensation (8.5 ) (8.5 ) Non-GAAP operating expense forecast $ 46.5 $ 47.5 RECONCILIATION OF OPERATING MARGIN FORECASTLOWHIGHGAAP operating margin forecast 5.5 % 7.5 % Adjustments to reconcile GAAP to non-GAAPStock-based compensation 7.9 % 7.9 % Amortization of acquisition-related intangible assets 0.1 % 0.1 % Non-GAAP operating margin forecast 13.5 % 15.5 % Joe Shiffler Power Integrations, Inc. (408) 414-8528 [email protected] Source: Power Integrations, Inc.