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

About this update from Power Integrations, Inc.

Quarterly revenues increased 18 percent year-over-year to $105.2 million ; GAAP earnings were $0.16 per diluted share; non-GAAP earnings were $0.30 per diluted share SAN JOSE, Calif. --(BUSINESS WIRE)-- Power Integrations (NASDAQ: POWI ) today announced financial results for the quarter and year ended December 31, 2024 . Net revenues for the fourth quarter were $105.2 million , down nine percent from the prior quarter and up 18 percent from the fourth quarter of 2023. GAAP net income for the fourth quarter was $9.1 million or $0.16 per diluted share compared to $0.25 per diluted share in the prior quarter and $0.25 per diluted share in the fourth quarter of 2023. Cash flow from operations for the fourth quarter was $14.7 million . In addition to its GAAP results, the company provided non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets and the related tax effects. Non-GAAP net income for the fourth quarter of 2024 was $17.2 million or $0.30 per diluted share compared to $0.40 per diluted share in the prior quarter and $0.22 per diluted share in the fourth quarter of 2023. A reconciliation of GAAP to non-GAAP financial results is included with the tables accompanying this press release. For the full year, net revenues were $419.0 million , compared to $444.5 million in the prior year. Full-year GAAP net income was $32.2 million or $0.56 per diluted share, compared to $0.97 per diluted share in the prior year. Non-GAAP net income was $1.16 per diluted share, compared to $1.29 per diluted share in the prior year. Cash flow from operations for the full year was $81.2 million . Commented Balu Balakrishnan , chairman and CEO of Power Integrations : “Fourth-quarter revenues were up 18 percent year-over-year, and we expect another double-digit increase in the first quarter. While the demand outlook is cloudy, especially in light of uncertainty around trade policy, we expect growth in a variety of end-markets in 2025, including renewable energy, high-voltage DC transmission, metering, automotive, appliances and more. Products featuring our proprietary PowiGaN™ technology should contribute significant growth this year as adoption accelerates across a broad set of high-voltage power-conversion applications.” Additional Highlights Power Integrations paid a dividend of $0.21 per share on December 31, 2024 . A dividend of $0.21 per share will be paid on March 31, 2025 , to stockholders of record as of February 28, 2025 . The company utilized $1.9 million for share repurchases during the fourth quarter, leaving $48.1 million remaining on its repurchase authorization as of December 31 . Financial Outlook The company issued the following forecast for the first quarter of 2025: Revenues are expected to be flat compared to the fourth quarter of 2024, plus or minus five percent. GAAP gross margin is expected to be between 55 percent and 55.5 percent, and non-GAAP gross margin is expected to be between 55.5 percent and 56 percent. The difference between GAAP and non-GAAP is primarily attributable to stock-based compensation, with a smaller impact from amortization of acquisition-related intangible assets. GAAP operating expenses are expected to be approximately $54 million ; non-GAAP operating expenses are expected to be approximately $45 million . Non-GAAP operating expenses are expected to exclude approximately $9 million of stock-based compensation. 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 live webcast of the call will be available on the investor section of the company's website, http://investors.power.com . Members of the investment community can register for the conference call by visiting https://emportal.ink/3C0h3y6 . 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 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 The above statements regarding the company’s forecast for its first-quarter financial performance and expectation of growth across a wide range of end-markets in 2025 are forward-looking statements reflecting management's current expectations and beliefs. These statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with the company's business, actual results could differ materially from those projected or implied by these statements. These risks and uncertainties include, but are not limited to: 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 revenues 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. In addition, new product introductions and design wins are subject to the risks and uncertainties that typically accompany development and delivery of complex technologies to the marketplace, including product development delays and defects and market acceptance of the new products. These and other risk factors that may cause actual results to differ are more fully explained under the caption “Risk Factors” in the company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 12, 2024 . The company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether because of new information, future events or otherwise, 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 (in thousands, except per-share amounts) Three Months Ended Twelve Months Ended December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 NET REVENUES $ 105,250 $ 115,837 $ 89,507 $ 418,973 $ 444,538 COST OF REVENUES 47,983 52,666 43,299 194,222 215,582 GROSS PROFIT 57,267 63,171 46,208 224,751 228,956 OPERATING EXPENSES: Research and development 25,689 25,829 23,505 100,790 96,067 Sales and marketing 16,931 17,119 15,472 67,825 64,598 General and administrative 10,728 8,641 8,282 38,207 33,232 Total operating expenses 53,348 51,589 47,259 206,822 193,897 INCOME (LOSS) FROM OPERATIONS 3,919 11,582 (1,051 ) 17,929 35,059 OTHER INCOME 3,384 2,750 3,282 12,825 10,848 INCOME BEFORE INCOME TAXES 7,303 14,332 2,231 30,754 45,907 PROVISION (BENEFIT) FOR INCOME TAXES (1,837 ) 41 (12,040 ) (1,480 ) (9,828 ) NET INCOME $ 9,140 $ 14,291 $ 14,271 $ 32,234 $ 55,735 EARNINGS PER SHARE: Basic $ 0.16 $ 0.25 $ 0.25 $ 0.57 $ 0.97 Diluted $ 0.16 $ 0.25 $ 0.25 $ 0.56 $ 0.97 SHARES USED IN PER-SHARE CALCULATION: Basic 56,848 56,817 56,937 56,820 57,195 Diluted 57,097 57,004 57,272 57,130 57,622 SUPPLEMENTAL INFORMATION: Three Months Ended Twelve Months Ended December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Stock-based compensation expenses included in: Cost of revenues $ 541 $ 496 $ 499 $ 2,090 $ 1,692 Research and development 3,280 2,997 2,947 12,587 10,939 Sales and marketing 2,074 1,876 1,827 8,064 6,888 General and administrative 3,394 2,969 2,230 12,335 9,009 Total stock-based compensation expense $ 9,289 $ 8,338 $ 7,503 $ 35,076 $ 28,528 Cost of revenues includes: Amortization of acquisition-related intangible assets $ 147 $ 147 $ 482 $ 1,034 $ 1,928 Three Months Ended Twelve Months Ended REVENUE MIX BY END MARKET December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Communications 13 % 12 % 27 % 12 % 29 % Computer 15 % 14 % 9 % 14 % 12 % Consumer 37 % 38 % 29 % 39 % 27 % Industrial 35 % 36 % 35 % 35 % 32 % POWER INTEGRATIONS, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS (in thousands, except per-share amounts) Three Months Ended Twelve Months Ended December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 RECONCILIATION OF GROSS PROFIT GAAP gross profit $ 57,267 $ 63,171 $ 46,208 $ 224,751 $ 228,956 GAAP gross margin 54.4 % 54.5 % 51.6 % 53.6 % 51.5 % Stock-based compensation included in cost of revenues 541 496 499 2,090 1,692 Amortization of acquisition-related intangible assets 147 147 482 1,034 1,928 Non-GAAP gross profit $ 57,955 $ 63,814 $ 47,189 $ 227,875 $ 232,576 Non-GAAP gross margin 55.1 % 55.1 % 52.7 % 54.4 % 52.3 % Three Months Ended Twelve Months Ended RECONCILIATION OF OPERATING EXPENSES December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 GAAP operating expenses $ 53,348 $ 51,589 $ 47,259 $ 206,822 $ 193,897 Less:Stock-based compensation expense included in operating expenses Research and development 3,280 2,997 2,947 12,587 10,939 Sales and marketing 2,074 1,876 1,827 8,064 6,888 General and administrative 3,394 2,969 2,230 12,335 9,009 Total 8,748 7,842 7,004 32,986 26,836 Non-GAAP operating expenses $ 44,600 $ 43,747 $ 40,255 $ 173,836 $ 167,061 Three Months Ended Twelve Months Ended RECONCILIATION OF INCOME FROM OPERATIONS December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 GAAP income (loss) from operations $ 3,919 $ 11,582 $ (1,051 ) $ 17,929 $ 35,059 GAAP operating margin 3.7 % 10.0 % -1.2 % 4.3 % 7.9 % Add:Total stock-based compensation 9,289 8,338 7,503 35,076 28,528 Amortization of acquisition-related intangible assets 147 147 482 1,034 1,928 Non-GAAP income from operations $ 13,355 $ 20,067 $ 6,934 $ 54,039 $ 65,515 Non-GAAP operating margin 12.7 % 17.3 % 7.7 % 12.9 % 14.7 % Three Months Ended Twelve Months Ended RECONCILIATION OF PROVISION FOR INCOME TAXES December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 GAAP provision (benefit) for income taxes $ (1,837 ) $ 41 $ (12,040 ) $ (1,480 ) $ (9,828 ) GAAP effective tax rate -25.2 % 0.3 % -539.7 % -4.8 % -21.4 % Tax effect of adjustments to GAAP results (1,366 ) (160 ) (9,556 ) (2,153 ) (11,653 ) Non-GAAP provision (benefit) for income taxes $ (471 ) $ 201 $ (2,484 ) $ 673 $ 1,825 Non-GAAP effective tax rate -2.8 % 0.9 % -24.3 % 1.0 % 2.4 % Three Months Ended Twelve Months Ended RECONCILIATION OF NET INCOME PER SHARE (DILUTED) December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 GAAP net income $ 9,140 $ 14,291 $ 14,271 $ 32,234 $ 55,735 Adjustments to GAAP net income Stock-based compensation 9,289 8,338 7,503 35,076 28,528 Amortization of acquisition-related intangible assets 147 147 482 1,034 1,928 Tax effect of items excluded from non-GAAP results (1,366 ) (160 ) (9,556 ) (2,153 ) (11,653 ) Non-GAAP net income $ 17,210 $ 22,616 $ 12,700 $ 66,191 $ 74,538 Average shares outstanding for calculation of non-GAAP net income per share (diluted) 57,097 57,004 57,272 57,130 57,622 Non-GAAP net income per share (diluted) $ 0.30 $ 0.40 $ 0.22 $ 1.16 $ 1.29 GAAP net income per share (diluted) $ 0.16 $ 0.25 $ 0.25 $ 0.56 $ 0.97 POWER INTEGRATIONS, INC. CONSOLIDATED BALANCE SHEETS (in thousands) December 31, 2024 September 30, 2024 December 31, 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 50,972 $ 58,469 $ 63,929 Short-term marketable securities 249,023 245,282 247,640 Accounts receivable, net 27,172 16,634 14,674 Inventories 165,612 167,680 163,164 Prepaid expenses and other current assets 21,260 19,821 22,193 Total current assets 514,039 507,886 511,600 PROPERTY AND EQUIPMENT, net 149,562 153,313 164,213 INTANGIBLE ASSETS, net 8,075 8,283 4,424 GOODWILL 95,271 95,271 91,849 DEFERRED TAX ASSETS 36,485 36,393 28,325 OTHER ASSETS 25,394 23,845 19,457 Total assets $ 828,826 $ 824,991 $ 819,868 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 29,789 $ 27,091 $ 26,390 Accrued payroll and related expenses 13,987 13,337 13,551 Taxes payable 961 1,063 1,016 Other accrued liabilities 10,580 9,267 7,910 Total current liabilities 55,317 50,758 48,867 LONG-TERM LIABILITIES: Income taxes payable 3,871 6,351 6,244 Other liabilities 19,866 18,669 12,516 Total liabilities 79,054 75,778 67,627 STOCKHOLDERS' EQUITY: Common stock 22 22 23 Additional paid-in capital 18,734 11,347 - Accumulated other comprehensive income (loss) (3,023 ) 1,008 (1,462 ) Retained earnings 734,039 736,836 753,680 Total stockholders' equity 749,772 749,213 752,241 Total liabilities and stockholders' equity $ 828,826 $ 824,991 $ 819,868 POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended Twelve Months Ended December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 9,140 $ 14,291 $ 14,271 $ 32,234 $ 55,735 Adjustments to reconcile net income to cash provided by operating activities Depreciation 7,743 8,454 8,887 33,303 35,203 Amortization of intangible assets 208 208 543 1,279 2,173 Loss on disposal of property and equipment 24 208 14 240 100 Stock-based compensation expense 9,289 8,338 7,503 35,076 28,528 Accretion of discount on marketable securities (385 ) (343 ) (497 ) (1,637 ) (351 ) Deferred income taxes 336 (5,206 ) 705 (8,352 ) (9,247 ) Increase (decrease) in accounts receivable allowance for credit losses 214 (785 ) - (245 ) (454 ) Change in operating assets and liabilities: Accounts receivable (10,752 ) 523 13,865 (12,253 ) 6,616 Inventories 2,068 2,204 (12,918 ) (2,448 ) (27,744 ) Prepaid expenses and other assets (1,613 ) 3,542 (346 ) 4,001 (1,183 ) Accounts payable 1,540 2,031 (2,553 ) 3,454 (5,435 ) Taxes payable and other accrued liabilities (3,086 ) (546 ) (13,207 ) (3,471 ) (18,182 ) Net cash provided by operating activities 14,726 32,919 16,267 81,181 65,759 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (3,045 ) (5,731 ) (6,143 ) (17,286 ) (20,884 ) Purchases of marketable securities (8,135 ) (19,751 ) (18,196 ) (105,716 ) (191,211 ) Proceeds from sales and maturities of marketable securities 2,796 18,414 36,045 106,602 197,942 Acquisition - (9,520 ) - (9,520 ) - Net cash provided by (used in) investing activities (8,384 ) (16,588 ) 11,706 (25,920 ) (14,153 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock - 3,009 - 5,700 6,237 Repurchase of common stock (1,902 ) - (47,444 ) (27,881 ) (55,278 ) Payments of dividends to stockholders (11,937 ) (11,364 ) (11,343 ) (46,037 ) (44,008 ) Net cash used in financing activities (13,839 ) (8,355 ) (58,787 ) (68,218 ) (93,049 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (7,497 ) 7,976 (30,814 ) (12,957 ) (41,443 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 58,469 50,493 94,743 63,929 105,372 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 50,972 $ 58,469 $ 63,929 $ 50,972 $ 63,929 View source version on businesswire.com : https://www.businesswire.com/news/home/20250206282925/en/ Joe Shiffler Power Integrations, Inc. (408) 414-8528 [email protected] Source: Power Integrations, Inc.

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