Power Integrations, Inc. Q4 FY2025 earnings call

• Q4 2025 revenue was $103 million with non-GAAP earnings of $0.23 per share. 2025 full year revenue up 6%, non-GAAP EPS up 8%, cash flow from operations $112 million. • Reduced non-GAAP expenses by over $2 million in Q4 and carried out a restructuring, reducing global workforce by about 7% to align expenses with revenue. • Booking improved significantly in Q4, with industrial market being a key driver of recent uptick in bookings. • PowiGaN products revenue grew over 40% in 2025. • Made progress in automotive with EV design wins, and in data center with engagements like with NVIDIA. • Streamlining R&D pipeline to focus on high-priority products and strengthening team with new hires in key roles.

In Q4 2025, revenue was $103 million. Revenue mix for the quarter was 37% industrial, 34% consumer, 15% communications, and 14%. For the full year 2025, revenue was up 6%, non-GAAP EPS grew by 8%, and cash flow from operations was $112 million, up $30 million from the prior year. Industrial revenue grew 15% in 2025, with high-power industrial business having a record year with double-digit growth. Consumer revenue had volatility but was slightly up full year. Communications revenue grew 6% for the year. Computer revenue was down 2% for the year. PowiGaN products revenue grew more than 40% in 2025.

• Q1 2026 revenue expected to be between $104 million and $109 million. • Non-GAAP gross margin expected to be between 53% and 54% in Q1. • Non-GAAP operating expenses for Q1 expected in the range of $46 million, plus or minus $0.5 million. • GAAP restructuring charge for Q1 expected between $3.5 million and $4 million. • Effective tax rate expected to be in the range of 7% to 8% in 2026.

• Appliance demand faces headwinds including low existing home sales in the U.S., effect of tariffs on appliance prices, and ongoing softness in China housing. • Automotive design ramps may face delays. • Inventory management challenges with channel inventory needing to be reduced. • Tax rate changes including nonrecurring solar credits and increase in tax rate on foreign earnings as per 2017 tax reform.

Q: Near term channel inventory and first quarter guides A: Nancy Erba stated they are focused on reducing inventory, expecting it to come down to a healthier level, with it dependent on Q1 bookings and mix Q: Long-term growth areas (GaN, auto, data center) A: Jen Lloyd said GaN is already meaningful, high power industrial growth is accelerating, automotive and data center take more time with automotive design ramps having delays but continuing to win designs, and data center making progress but being the longest-term play Q: Automotive revenue timing A: Jen Lloyd said automotive growth is more of a 2027 target due to design ramps pushing out but still seeing design wins Q: OpEx post-restructuring A: Nancy Erba said they aim to cut OpEx growth to about half the revenue growth rate, expecting a $3 million to $5 million reduction for the year Q: Consumer segment exit or growth A: Jennifer Lloyd said consumer is still an important growth segment with no plans to exit it Q: Cloud provider aux power and AI applications A: Jennifer Lloyd said aux power is an entry point with plans to expand into main power supplies for data center applications Q: Industrial growth underpinnings A: Jennifer Lloyd said high-power industrial business growth and metering growth are drivers of industrial growth for 2026