Power Integrations Reports First-Quarter Financial Results

SAN JOSE, Calif.--(BUSINESS WIRE)--April 28, 2022--Power Integrations (NASDAQ: POWI) today announced financial results for the quarter ended March 31, 2022. Net revenues for the first quarter were $182.1 million, up five percent compared to the prior quarter and up five percent from the first quarter of 2021. Net income for the first quarter was $46.2 million or $0.77 per diluted share compared to $0.66 per diluted share in the prior quarter and $0.65 per diluted share in the first quarter of 2021. Cash flow from operations for the first quarter was $74.6 million.

In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets and the tax effects of these items. Non-GAAP net income for the first quarter of 2022 was $55.8 million or $0.93 per diluted share compared with $0.83 per diluted share in the prior quarter and $0.76 per diluted share in the first quarter of 2021. A reconciliation of GAAP to non-GAAP financial results is included with the tables accompanying this press release.

Commented Balu Balakrishnan, president and CEO of Power Integrations: “We continued our momentum with another quarter of record revenues, strong earnings growth and healthy cash flow. Our innovative products and strong delivery performance are driving broad-based market-share gains, while dollar content continues to expand in areas like appliances and mobile-device chargers. We are seeing strong uptake of our highly integrated GaN products and our BridgeSwitch™ motor-drive ICs, and we have a robust pipeline of new products leveraging leading-edge technologies such as FluxLink™ isolation technology and proprietary PowiGaN™ transistors.”

Additional Highlights

• Power Integrations repurchased 1.6 million shares of its common stock during the first quarter for $134.7 million. Approximately $83 million remained on the company’s repurchase authorization at quarter-end, of which $75 million has been used in April for the repurchase of an additional 0.9 million shares. The company’s board of directors has subsequently allocated an additional $75 million for share repurchases.
• The company paid a dividend of $0.18 per share on March 31, 2022. A dividend of $0.18 per share is to be paid on June 30, 2022, to stockholders of record as of May 31, 2022.

Financial Outlook

The company issued the following forecast for the second quarter of 2022:

• Revenues are expected to be $190 million plus or minus $5 million.
• GAAP gross margin is expected to be between 55.5 percent and 56 percent. Non-GAAP gross margin is expected to be between 56 percent and 56.5 percent. The difference between GAAP and non-GAAP gross margins is approximately equally attributable to stock-based compensation and amortization of acquisition-related intangible assets.
• GAAP operating expenses are expected to be between $52.5 million and $53.5 million; non-GAAP operating expenses are expected to be between $43.5 million and $44.5 million. Non-GAAP expenses are expected to exclude approximately $8.9 million of stock-based compensation and $0.1 million of amortization of acquisition-related intangible assets.

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. Members of the investment community can register for the call by visiting the following link: https://conferencingportals.com/event/iobnvsok. A live webcast of the call will also be available on the investor section of the company's website, 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, 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 second-quarter financial performance are forward-looking statements reflecting management's current expectations and beliefs. These forward-looking 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: the impact of the COVID-19 pandemic on demand for the company’s products, its ability to supply products and its ability to conduct other aspects of its business such as competing for new design wins; changes in global macroeconomic 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 (SEC) on February 7, 2022. 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, FluxLink, PowiGaN, BridgeSwitch and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc.