Power Integrations Reports Third-Quarter Financial Results

About this update from Power Integrations, Inc.

Revenues increased three percent year-over-year to $119 million ; cash flow from operations was $30 million Share repurchases of $42 million during the quarter; announces dividend increase SAN JOSE, Calif. --(BUSINESS WIRE)-- Power Integrations (NASDAQ: POWI ) today announced financial results for the quarter ended September 30, 2025 . Net revenues for the third quarter were $118.9 million , up three percent compared to the prior quarter and up three percent from the third quarter of 2024. GAAP net loss for the third quarter was $1.4 million or $0.02 per diluted share compared to net income of $0.02 per diluted share in the prior quarter and net income of $0.25 per diluted share in the third quarter of 2024. Cash flow from operations for the quarter was $29.9 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 related tax effects of these items. Non-GAAP net income for the third quarter of 2025 was $20.2 million or $0.36 per diluted share compared to $0.35 per diluted share in the prior quarter and $0.40 per diluted share in the third quarter of 2024. A reconciliation of GAAP to non-GAAP financial results is included with the tables accompanying this press release. Power Integrations CEO Jennifer Lloyd commented: “Our industrial business remains on track for strong growth in 2025 after a 20 percent year-over-year increase in the third quarter, while orders for consumer appliances continue to be soft after accelerated shipments earlier in the year ahead of U.S. tariffs. Overall, we are on course for solid growth in 2025 despite the challenging economic backdrop, and remain focused on secular growth opportunities in high voltage, including GaN, grid modernization, electric transportation and data center. Last month we detailed the capabilities of our 1250- and 1700-volt PowiGaN™ technologies for next-gen AI data centers, including our collaboration with NVIDIA on 800 VDC power architecture.” Additional Highlights Power Integrations repurchased 919 thousand shares during the quarter for $42.4 million , completing the company’s repurchase authorization. The company paid a dividend of $0.21 per share on September 30, 2025 . A dividend of $0.21 per share will be paid on December 31, 2025 , to stockholders of record as of November 28, 2025 . The company’s board of directors has increased the quarterly dividend to $0.215 per share for each of the four quarters of 2026. Financial Outlook The company issued the following forecast for the fourth quarter of 2025: Revenues are expected to be in a range of $100 million to $105 million . GAAP gross margin is expected to be between 53 percent and 53.5 percent, and non-GAAP gross margin is expected to be between 53.5 percent and 54 percent. The difference between the GAAP and non-GAAP gross margins is attributable to stock-based compensation and, to a lesser extent, amortization of acquisition-related intangible assets. GAAP operating expenses are expected to be approximately $56 million ; non-GAAP operating expenses are expected to be approximately $47 million . Non-GAAP operating expenses are expected to exclude approximately $9 million of stock-based compensation. Conference Call Today at 9:00 a.m. Eastern Time Power Integrations management will hold a conference call today at 9:00 a.m. Eastern 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 The above statements regarding the company’s forecast for its fourth-quarter financial performance 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: 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 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 7, 2025 . 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 (LOSS) (in thousands, except per-share amounts) Three Months Ended Nine Months Ended September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 NET REVENUES $ 118,919 $ 115,852 $ 115,837 $ 340,300 $ 313,723 COST OF REVENUES 54,068 51,898 52,666 153,260 146,239 GROSS PROFIT 64,851 63,954 63,171 187,040 167,484 OPERATING EXPENSES: Research and development 26,696 25,991 25,829 76,782 75,101 Sales and marketing 17,455 18,349 17,119 52,179 50,894 General and administrative 10,374 11,808 8,641 33,229 27,479 Other operating expenses 14,279 9,151 - 23,430 - Total operating expenses 68,804 65,299 51,589 185,620 153,474 INCOME (LOSS) FROM OPERATIONS (3,953 ) (1,345 ) 11,582 1,420 14,010 OTHER INCOME 2,555 2,690 2,750 8,412 9,441 INCOME (LOSS) BEFORE INCOME TAXES (1,398 ) 1,345 14,332 9,832 23,451 PROVISION (BENEFIT) FOR INCOME TAXES (42 ) (24 ) 41 1,029 357 NET INCOME (LOSS) $ (1,356 ) $ 1,369 $ 14,291 $ 8,803 $ 23,094 EARNINGS (LOSS) PER SHARE: Basic $ (0.02 ) $ 0.02 $ 0.25 $ 0.16 $ 0.41 Diluted $ (0.02 ) $ 0.02 $ 0.25 $ 0.16 $ 0.40 SHARES USED IN PER-SHARE CALCULATION: Basic 55,796 56,274 56,817 56,310 56,810 Diluted 55,796 56,387 57,004 56,586 57,106 SUPPLEMENTAL INFORMATION: Three Months Ended Nine Months Ended September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Stock-based compensation expenses included in: Cost of revenues $ 517 $ 592 $ 496 $ 1,766 $ 1,549 Research and development 2,850 3,190 2,997 8,290 9,307 Sales and marketing 1,910 1,922 1,876 5,418 5,990 General and administrative 2,374 4,373 2,969 10,937 8,941 Other operating expenses 13,554 - - 13,554 - Total stock-based compensation expense $ 21,205 $ 10,077 $ 8,338 $ 39,965 $ 25,787 Cost of revenues includes: Amortization of acquisition-related intangible assets $ 147 $ 146 $ 147 $ 440 $ 887 Three Months Ended Nine Months Ended REVENUE MIX BY END MARKET September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Communications 11 % 11 % 12 % 11 % 11 % Computer 13 % 12 % 14 % 13 % 14 % Consumer 34 % 37 % 38 % 37 % 40 % Industrial 42 % 40 % 36 % 39 % 35 % POWER INTEGRATIONS, INC. CONSOLIDATED BALANCE SHEETS (in thousands) September 30, 2025 June 30, 2025 December 31, 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 48,646 $ 66,935 $ 50,972 Short-term marketable securities 193,214 201,801 249,023 Accounts receivable, net 31,515 27,583 27,172 Inventories 164,618 168,396 165,612 Prepaid expenses and other current assets 18,070 18,188 21,260 Total current assets 456,063 482,903 514,039 PROPERTY AND EQUIPMENT, net 147,915 147,955 149,562 INTANGIBLE ASSETS, net 7,452 7,660 8,075 GOODWILL 95,271 95,271 95,271 DEFERRED TAX ASSETS 37,125 37,174 36,485 OTHER ASSETS 28,704 26,574 25,394 Total assets $ 772,530 $ 797,537 $ 828,826 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 37,459 $ 31,044 $ 29,789 Accrued payroll and related expenses 14,233 14,881 13,987 Taxes payable 890 751 961 Other accrued liabilities 18,513 18,323 10,580 Total current liabilities 71,095 64,999 55,317 LONG-TERM LIABILITIES: Income taxes payable 4,556 4,063 3,871 Other liabilities 24,903 24,687 19,866 Total liabilities 100,554 93,749 79,054 STOCKHOLDERS' EQUITY: Common stock 20 21 22 Additional paid-in capital - - 18,734 Accumulated other comprehensive loss (1,262 ) (1,287 ) (3,023 ) Retained earnings 673,218 705,054 734,039 Total stockholders' equity 671,976 703,788 749,772 Total liabilities and stockholders' equity $ 772,530 $ 797,537 $ 828,826 POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended Nine Months Ended September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (1,356 ) $ 1,369 $ 14,291 $ 8,803 $ 23,094 Adjustments to reconcile net income (loss) to cash provided by operating activities: Depreciation 6,542 7,002 8,454 20,788 25,560 Amortization of intangible assets 208 208 208 623 1,071 Loss (gain) on disposal of property and equipment (108 ) - 208 (108 ) 216 Stock-based compensation expense 21,205 10,077 8,338 39,965 25,787 Accretion of discount on marketable securities (198 ) (375 ) (343 ) (919 ) (1,252 ) Deferred income taxes (7 ) 1,683 (5,206 ) (861 ) (8,688 ) Decrease in accounts receivable allowance for credit losses - - (785 ) (381 ) (459 ) Change in operating assets and liabilities: Accounts receivable (3,932 ) (4,777 ) 523 (3,962 ) (1,501 ) Inventories 3,778 672 2,204 994 (4,516 ) Prepaid expenses and other assets (1,204 ) 3,036 3,542 5,201 5,614 Accounts payable 5,767 (3,754 ) 2,031 6,015 1,914 Taxes payable and other accrued liabilities (841 ) 13,931 (546 ) 9,154 (385 ) Net cash provided by operating activities 29,854 29,072 32,919 85,312 66,455 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (5,694 ) (5,926 ) (5,731 ) (17,346 ) (14,241 ) Proceeds from sale of property and equipment 150 - - 150 - Purchases of marketable securities (11,079 ) (42,066 ) (19,751 ) (58,775 ) (97,581 ) Proceeds from sales and maturities of marketable securities 20,166 80,610 18,414 116,658 103,806 Payment for acquisition, net of cash acquired - - (9,520 ) - (9,520 ) Net cash provided by (used in) investing activities 3,543 32,618 (16,588 ) 40,687 (17,536 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock 2,539 - 3,009 5,326 5,700 Repurchase of common stock (42,440 ) (32,560 ) - (98,098 ) (25,979 ) Payments of dividends to stockholders (11,785 ) (11,809 ) (11,364 ) (35,553 ) (34,100 ) Proceeds from draw on line of credit - 13,000 - 13,000 - Payments on line of credit - (13,000 ) - (13,000 ) - Net cash used in financing activities (51,686 ) (44,369 ) (8,355 ) (128,325 ) (54,379 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (18,289 ) 17,321 7,976 (2,326 ) (5,460 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 66,935 49,614 50,493 50,972 63,929 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 48,646 $ 66,935 $ 58,469 $ 48,646 $ 58,469 POWER INTEGRATIONS, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS (in thousands, except per-share amounts) Three Months Ended Nine Months Ended September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 RECONCILIATION OF GROSS PROFIT GAAP gross profit $ 64,851 $ 63,954 $ 63,171 $ 187,040 $ 167,484 GAAP gross margin 54.5 % 55.2 % 54.5 % 55.0 % 53.4 % Stock-based compensation included in cost of revenues 517 592 496 1,766 1,549 Amortization of acquisition-related intangible assets 147 146 147 440 887 Non-GAAP gross profit $ 65,515 $ 64,692 $ 63,814 $ 189,246 $ 169,920 Non-GAAP gross margin 55.1 % 55.8 % 55.1 % 55.6 % 54.2 % Three Months Ended Nine Months Ended RECONCILIATION OF OPERATING EXPENSES September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 GAAP operating expenses $ 68,804 $ 65,299 $ 51,589 $ 185,620 $ 153,474 Less: Stock-based compensation expense included in operating expenses Research and development 2,850 3,190 2,997 8,290 9,307 Sales and marketing 1,910 1,922 1,876 5,418 5,990 General and administrative 2,374 4,373 2,969 10,937 8,941 Other operating expenses 13,554 - - 13,554 - Other operating expenses 725 9,151 - 9,876 - Total 21,413 18,636 7,842 48,075 24,238 Non-GAAP operating expenses $ 47,391 $ 46,663 $ 43,747 $ 137,545 $ 129,236 Three Months Ended Nine Months Ended RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 GAAP income (loss) from operations $ (3,953 ) $ (1,345 ) $ 11,582 $ 1,420 $ 14,010 GAAP operating margin -3.3 % -1.2 % 10.0 % 0.4 % 4.5 % Add: Total stock-based compensation 21,205 10,077 8,338 39,965 25,787 Amortization of acquisition-related intangible assets 147 146 147 440 887 Other operating expenses 725 9,151 - 9,876 - Non-GAAP income from operations $ 18,124 $ 18,029 $ 20,067 $ 51,701 $ 40,684 Non-GAAP operating margin 15.2 % 15.6 % 17.3 % 15.2 % 13.0 % Three Months Ended Nine Months Ended RECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXES September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 GAAP provision (benefit) for income taxes $ (42 ) $ (24 ) $ 41 $ 1,029 $ 357 GAAP effective tax rate -3.0 % -1.8 % 0.3 % 10.5 % 1.5 % Tax effect of adjustments to GAAP results (527 ) (871 ) (160 ) (1,159 ) (787 ) Non-GAAP provision for income taxes $ 485 $ 847 $ 201 $ 2,188 $ 1,144 Non-GAAP effective tax rate 2.3 % 4.1 % 0.9 % 3.6 % 2.3 % Three Months Ended Nine Months Ended RECONCILIATION OF NET INCOME (LOSS) PER SHARE (DILUTED) September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 GAAP net income (loss) $ (1,356 ) $ 1,369 $ 14,291 $ 8,803 $ 23,094 Adjustments to GAAP net income (loss) Stock-based compensation 21,205 10,077 8,338 39,965 25,787 Amortization of acquisition-related intangible assets 147 146 147 440 887 Other operating expenses 725 9,151 - 9,876 - Tax effect of items excluded from non-GAAP results (527 ) (871 ) (160 ) (1,159 ) (787 ) Non-GAAP net income $ 20,194 $ 19,872 $ 22,616 $ 57,925 $ 48,981 Average shares outstanding for calculation of non-GAAP net income per share (diluted) 56,162 56,387 57,004 56,586 57,106 Non-GAAP net income per share (diluted) $ 0.36 $ 0.35 $ 0.40 $ 1.02 $ 0.86 GAAP net income (loss) per share (diluted) $ (0.02 ) $ 0.02 $ 0.25 $ 0.16 $ 0.40 View source version on businesswire.com : https://www.businesswire.com/news/home/20251105428913/en/ Contact: Joe Shiffler Power Integrations, Inc. (408) 414-8528 [email protected] Source: Power Integrations, Inc.

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