Power Integrations Reports Second-Quarter Financial Results

Revenues increased nine percent year-over-year to $115.9 million

Company repurchased 706 thousand shares during the quarter for $32.6 million

Power Integrations (NASDAQ: POWI) today announced financial results for the quarter ended June 30, 2025. Net revenues for the second quarter were $115.9 million, up ten percent compared to the prior quarter and up nine percent from the second quarter of 2024. GAAP net income for the second quarter was $1.4 million or $0.02 per diluted share compared to $0.15 per diluted share in the prior quarter and $0.09 per diluted share in the second quarter of 2024. Cash flow from operations for the quarter was $29.1 million.

In addition to its GAAP results, the company provided non-GAAP measures that exclude stock-based compensation, a charge stemming from litigation related to an employment matter, amortization of acquisition-related intangible assets and the related tax effects. Non-GAAP net income for the second quarter of 2025 was $19.9 million or $0.35 per diluted share compared to $0.31 per diluted share in the prior quarter and $0.28 per diluted share in the second 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: "Revenues increased nine percent year-over-year driven by strong growth in the industrial category. While near-term visibility is low due to macroeconomic uncertainty, our long-term growth drivers are on track. Our automotive business continues to build toward a material revenue contribution in 2026. Revenues from GaN-based products grew more than 50 percent in the first half with adoption broadening into appliance, industrial and EV applications. Our 1250- and 1700-volt GaN technologies are well suited for the requirements of next-generation AI datacenters, and we are developing differentiated, system-level products to capitalize on that opportunity."

Additional Highlights

• The company repurchased 706 thousand shares during the quarter for $32.6 million; $42.4 million remained on its repurchase authorization at quarter-end.
• Power Integrations paid a dividend of $0.21 per share on June 30, 2025. A dividend of $0.21 per share will be paid on September 30, 2025, to stockholders of record as of August 29, 2025.

Financial Outlook

The company issued the following forecast for the third quarter of 2025:

• Revenues are expected to be in a range of $118 million plus or minus $5 million.
• GAAP gross margin is expected to be between 54.5 percent and 55 percent, and non-GAAP gross margin is expected to be between 55 percent and 55.5 percent. The difference between GAAP and non-GAAP 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 $72.5 million; non-GAAP operating expenses are expected to be approximately $47.5 million. Non-GAAP operating expenses are expected to exclude approximately $10 million of stock-based compensation and a net non-cash charge of approximately $15 million reflecting the immediate expensing of stock awards previously granted to the company's former CEO. The grants will continue to vest according to their original terms, including performance criteria, under a consultancy agreement with the former CEO.

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/4eCXH0R.

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, other operating expenses of $9.2 million 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 third-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 and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc. All other trademarks are property of their respective owners.

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Joe Shiffler

Power Integrations, Inc.

(408) 414-8528

[email protected]