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

Full-year revenue increased six percent to $443.5 million; cash flow from operations was $111.5 million

Announces workforce reduction and related restructuring charge

Power Integrations (NASDAQ: POWI) today announced financial results for the quarter and year ended December 31, 2025. Net revenue for the fourth quarter was $103.2 million, down 13 percent from the prior quarter and down two percent from the fourth quarter of 2024. GAAP net income for the fourth quarter was $13.3 million or $0.24 per diluted share compared to a net loss of $0.02 per diluted share in the prior quarter and net income of $0.16 per diluted share in the fourth quarter of 2024. Cash flow from operations for the fourth quarter was $26.2 million.

For the full year 2025, net revenue was $443.5 million, up six percent compared to the prior year. GAAP net income was $22.1 million or $0.39 per diluted share compared to $0.56 per diluted share in the prior year. Cash flow from operations for the year was $111.5 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 tax effects of these items. Non-GAAP net income for the fourth quarter of 2025 was $12.7 million or $0.23 per diluted share compared to $0.36 per diluted share in the prior quarter and $0.30 per diluted share in the fourth quarter of 2024. Full-year non-GAAP net income was $70.7 million or $1.25 per diluted share compared to $1.16 per diluted share in the prior year. A reconciliation of GAAP to non-GAAP financial results and outlook is included with the tables accompanying this press release.

Power Integrations also today announced that it has carried out a restructuring plan, reducing its global workforce by seven percent. The company expects to incur a charge of between $3.5 million and $4.0 million in the first quarter of 2026 associated with severance benefits and related expenses.

Power Integrations CEO Jen Lloyd commented: "I am pleased that we returned to growth in 2025 with a six-percent increase in total revenue, led by our industrial category which grew 15 percent. The growth in industrial was driven by record sales in our high-power gate-driver business, plus strength in metering, power tools, automotive and broad-based industrial applications. Additionally, total revenue from PowiGaN™ products grew more than 40 percent for the year."

Dr. Lloyd continued: "Our addressable market continues to expand as AI data centers, electrification, grid modernization and other macro trends drive demand for innovative high-voltage technologies. We are taking steps to align our organization with these opportunities, including a restructuring of our workforce to better align expenses with revenue and create flexibility to invest in the products, people, and markets we expect to drive long-term growth and profitability."

Financial Outlook / Dividend

The company issued the following forecast for the first quarter of 2026:

• Revenue is expected to be in a range of $104 million to $109 million.
• GAAP gross margin is expected to be between 52 percent and 53 percent, and non-GAAP gross margin is expected to be between 53 percent and 54 percent.
• GAAP operating expenses are expected to be between $54 million and $55.5 million, and non-GAAP operating expenses are expected to be $46 million plus or minus $0.5 million.
• The company paid a dividend of $0.21 per share on December 31, 2025. A dividend of $0.215 per share will be paid on March 31, 2026, to stockholders of record as of February 27, 2026.

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 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

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 expectations, strategy, priorities, plans or intentions. Forward-looking statements in this release include, but are not limited to, the company's restructuring plans and anticipated charges, the company's guidance and outlook for the first quarter of 2026, and 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, filed with the Securities and Exchange Commission on February 7, 2025 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.

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Joe Shiffler

Power Integrations, Inc.

(408) 414-8528

[email protected]