POWI - Q1'26 - 8-K

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Power Integrations Reports First-Quarter Financial Results

Revenue increased three percent year-over-year to $108.3 million; cash flow from operations was $20.0 million

SAN JOSE, Calif. – May 7, 2026 – 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 most recent 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 Ended
	March 31, 2026			December 31, 2025			March 31, 2025
Net 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 Ended
	March 31, 2026			December 31, 2025			March 31, 2025
Stock-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 Ended
	March 31, 2026			December 31, 2025			March 31, 2025
Revenue mix by end market:
Communications		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 Ended
	March 31, 2026		December 31, 2025		March 31, 2025
RECONCILIATION OF GROSS PROFIT
GAAP 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 Ended
	March 31, 2026		December 31, 2025		March 31, 2025
RECONCILIATION OF OPERATING EXPENSES
GAAP operating expenses	$	55,484	$	45,835	$	51,517

Less: Stock-based compensation expense included in operating expenses
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)		—
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 Ended
	March 31, 2026		December 31, 2025		March 31, 2025
RECONCILIATION OF INCOME FROM OPERATIONS
GAAP 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 Ended
	March 31, 2026		December 31, 2025		March 31, 2025
RECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXES
GAAP 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 Ended
	March 31, 2026		December 31, 2025		March 31, 2025
RECONCILIATION OF NET INCOME PER SHARE (DILUTED)
GAAP net income	$	3,300	$	13,290	$	8,790

Adjustments to GAAP net income
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		—
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 calculation of 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 FLOW	March 31, 2026
Cash 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, 2026		December 31, 2025
ASSETS
	Current 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’ EQUITY
	Current 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 Ended
		March 31, 2026			December 31, 2025			March 31, 2025
CASH 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 intangible assets			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 FORECAST	LOW			HIGH
GAAP gross margin forecast	53.5		%	54.5		%

Adjustments to reconcile GAAP to non-GAAP
Stock-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 FORECAST	LOW			HIGH
GAAP operating-expense forecast	$	55.0		$	56.0

Adjustments to reconcile GAAP to non-GAAP
Stock-based compensation		(8.5)			(8.5)

Non-GAAP operating-expense forecast	$	46.5		$	47.5


RECONCILIATION OF OPERATING MARGIN FORECAST	LOW			HIGH
GAAP operating margin forecast	5.5		%	7.5		%

Adjustments to reconcile GAAP to non-GAAP
Stock-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		%

Contact:

Joe Shiffler
Power Integrations, Inc.
(408) 414-8528
joe@power.com