Power Integrations 2025 Q1 Earnings Strong Performance as Net Income Surges 122%

Power Integrations (POWI) reported its fiscal 2025 Q1 earnings on May 12th, 2025. The company exceeded expectations with net income surging 122.3% to $8.79 million, compared to $3.95 million the previous year. Revenue increased by 15.1% year-over-year, reaching $105.53 million. Power Integrations provided in-line guidance for Q2 2025, forecasting revenues of $115 million, plus or minus $5 million. Non-GAAP gross margin is projected at approximately 55.5%, slightly down from Q1 due to end market mix and input costs.

Revenue

The total revenue of Power Integrations increased by 15.1% to $105.53 million in 2025 Q1, up from $91.69 million in 2024 Q1.

Earnings/Net Income

Power Integrations's EPS rose 114.3% to $0.15 in 2025 Q1 from $0.07 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $8.79 million in 2025 Q1, marking 122.3% growth from $3.95 million in 2024 Q1. The Company has sustained profitability for 14 years over the corresponding fiscal quarter, reflecting stable business performance. EPS performance is notably positive this quarter.

Price Action

The stock price of Power Integrations has edged up 1.55% during the latest trading day, has surged 16.76% during the most recent full trading week, and has surged 22.10% month-to-date.

Post-Earnings Price Action Review

The strategy of buying POWI when there is a revenue miss and holding for 30 days resulted in poor performance. The backtest showed a significant loss of -18.97% with a Sharpe Ratio of -0.10, indicating a high risk and low return. The maximum drawdown was -69.71%, and the volatility was 40.16%, which suggests that the strategy carried substantial risk and did not provide any positive returns. Investors should note the considerable risk involved with this strategy, as evidenced by the historical data indicating a negative outcome.

CEO Commentary

Balu Balakrishnan, Chairman and Chief Executive Officer, stated, "Our Q1 results were on target with revenues... up 15% year-over-year." He highlighted strong growth drivers in the Consumer category, particularly in appliances and air conditioning, attributing part of this to front-loading shipments ahead of tariffs. Balakrishnan noted, "Bookings have been stable with no abnormal pull-ins, push-outs or cancellations of orders," reflecting a solid business performance. He expressed confidence in future growth, particularly in Industrial, driven by high-power design wins and the increasing role of GaN technology. His outlook was cautiously optimistic, acknowledging potential impacts from trade policy but emphasizing strong demand fundamentals.

Guidance

Power Integrations expects Q2 revenues of $115 million, plus or minus $5 million, translating to an 8% year-over-year increase. Non-GAAP gross margin is projected at approximately 55.5%, slightly down from Q1 due to a less favorable end market mix and higher input costs. Operating expenses for Q2 are anticipated to be around $46 million, reflecting annual salary increases and headcount additions. The company plans to continue share repurchases, having previously bought back nearly 2% of outstanding shares year-to-date.

Additional News

In recent developments, Power Integrations has announced a new $50 million share-repurchase authorization following the completion of its prior $50 million buyback. The company repurchased 404,000 shares of its common stock during the first quarter for $23.1 million and an additional 560,000 shares in April, utilizing the remaining $25 million from the previous authorization. Additionally, Power Integrations will pay a dividend of $0.21 per share on June 30, 2025, to stockholders of record as of May 30, 2025. These actions underscore the company's strong balance sheet and commitment to returning value to shareholders amidst market volatility.