Power Integrations (NASDAQ:POWI) Releases Earnings Results, Beats Estimates By $0.05 EPS

Key Points

• Power Integrations beat quarterly expectations, reporting $0.37 in EPS versus the $0.32 consensus and revenue of $118.94 million versus $117.44 million. Revenue increased 2.6% year over year.
• Management reported 10% sequential revenue growth, stronger industrial and automotive demand, and $18 million in free cash flow. It expects third-quarter revenue of $122 million to $130 million and lower full-year operating expenses.
• The company’s long-term 2,200-volt PowiGaN technology supports data-center, automotive, and infrastructure opportunities, although meaningful related revenue is likely several years away. Analysts’ average rating remains Hold, with an average price target of $76.20.

Power Integrations (NASDAQ:POWI - Get Free Report) released its quarterly earnings data on Wednesday. The semiconductor company reported $0.37 earnings per share for the quarter, beating the consensus estimate of $0.32 by $0.05, FiscalAI reports. The company had revenue of $118.94 million for the quarter, compared to the consensus estimate of $117.44 million. Power Integrations had a return on equity of 5.34% and a net margin of 3.72%.Power Integrations's revenue for the quarter was up 2.6% on a year-over-year basis. During the same quarter last year, the business posted $0.35 EPS.

Here are the key takeaways from Power Integrations' conference call:

• Q2 revenue rose 10% sequentially to $118.9 million, with growth across all four end-market categories; non-GAAP operating margin expanded to 17.1% and free cash flow reached $18 million.
• Industrial revenue grew 14% in Q2 and 16% year-to-date, while automotive revenue is on track to double in 2026. The company also cited new automotive GaN and utility-scale battery-storage design wins.
• Power Integrations expects Q3 revenue of $122 million to $130 million, with communications, computer, and industrial sales continuing to grow; it now expects full-year non-GAAP operating expenses to decline by low single digits.
• Channel inventory declined to 7.3 weeks, returning to management’s targeted healthy range, while the company expects further inventory reductions in the second half and believes its supply-chain structure could support customer upside.
• The demonstrated 2,200-volt PowiGaN technology strengthens the company’s long-term data-center, automotive, and infrastructure roadmap, but management said meaningful products and revenue are likely several years away; near-term data-center revenue is expected primarily from auxiliary-power designs around 2028.

Power Integrations Stock Performance

Shares of NASDAQ:POWI traded down $2.62 during trading on Wednesday, reaching $61.95. The stock had a trading volume of 796,504 shares, compared to its average volume of 702,161. The firm's fifty day moving average is $74.56 and its 200 day moving average is $61.89. Power Integrations has a 52 week low of $30.86 and a 52 week high of $91.18. The stock has a market cap of $3.45 billion, a price-to-earnings ratio of 206.51 and a beta of 1.58.

Power Integrations Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Tuesday, June 30th. Stockholders of record on Friday, May 29th were given a $0.215 dividend. The ex-dividend date was Friday, May 29th. This represents a $0.86 dividend on an annualized basis and a dividend yield of 1.4%. Power Integrations's payout ratio is 286.67%.

Analyst Upgrades and Downgrades

Several research firms have commented on POWI. Stifel Nicolaus increased their target price on Power Integrations from $82.00 to $95.00 and gave the company a "buy" rating in a research report on Wednesday, June 24th. Zacks Research cut Power Integrations from a "strong-buy" rating to a "hold" rating in a report on Monday, July 20th. Needham & Company LLC initiated coverage on Power Integrations in a research note on Wednesday, June 10th. They issued a "buy" rating and a $90.00 price objective for the company. Weiss Ratings reiterated a "sell (d+)" rating on shares of Power Integrations in a report on Friday, May 8th. Finally, Susquehanna raised their price objective on shares of Power Integrations from $70.00 to $85.00 and gave the company a "positive" rating in a report on Friday, May 8th. Four investment analysts have rated the stock with a Buy rating, three have given a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the company presently has an average rating of "Hold" and an average target price of $76.20.

Insider Buying and Selling

In related news, Director Balu Balakrishnan sold 124,287 shares of the company's stock in a transaction dated Thursday, May 28th. The stock was sold at an average price of $86.44, for a total transaction of $10,743,368.28. Following the sale, the director owned 279,516 shares in the company, valued at $24,161,363.04. This represents a 30.78% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Nicholas Brathwaite sold 6,895 shares of the firm's stock in a transaction that occurred on Wednesday, May 13th. The stock was sold at an average price of $72.41, for a total value of $499,266.95. Following the sale, the director directly owned 30,609 shares of the company's stock, valued at $2,216,397.69. This represents a 18.38% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold 334,772 shares of company stock valued at $27,322,535 over the last quarter. Insiders own 1.20% of the company's stock.

Institutional Investors Weigh In On Power Integrations

Several hedge funds and other institutional investors have recently bought and sold shares of POWI. Geneos Wealth Management Inc. raised its holdings in shares of Power Integrations by 576.3% during the first quarter. Geneos Wealth Management Inc. now owns 629 shares of the semiconductor company's stock valued at $32,000 after purchasing an additional 536 shares during the period. Kestra Advisory Services LLC acquired a new stake in shares of Power Integrations in the 4th quarter valued at about $36,000. UMB Bank n.a. grew its stake in shares of Power Integrations by 61.7% in the 4th quarter. UMB Bank n.a. now owns 1,074 shares of the semiconductor company's stock valued at $38,000 after buying an additional 410 shares during the period. Osaic Holdings Inc. grew its stake in shares of Power Integrations by 76.2% in the 2nd quarter. Osaic Holdings Inc. now owns 1,721 shares of the semiconductor company's stock valued at $92,000 after buying an additional 744 shares during the period. Finally, Strs Ohio bought a new stake in Power Integrations in the 1st quarter valued at about $126,000.

About Power Integrations

Power Integrations, Inc, based in Hillsboro, Oregon, specializes in the design and development of high-performance analog and mixed-signal integrated circuits for energy-efficient power conversion. The company's products are used to convert and regulate electrical power in a wide range of applications, from consumer electronics and industrial systems to communications equipment and electric vehicle charging. By providing compact, reliable, and highly integrated solutions, Power Integrations aims to reduce system size, improve efficiency, and simplify thermal management for its customers.

The firm's product portfolio encompasses isolated and non-isolated switching controllers for both AC-DC and DC-DC power conversion.

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