Earnings release
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Exhibit 99.1 Power Integrations Reports Second - Quarter Financial Results Revenue increased ten percent sequentially to $ 118.9 million ; GAAP earnings were $ 0.17 per diluted share ; non- GAAP earnings were $ 0.37 per diluted share Cash flow from operations was $ 22.0 million SAN JOSE , Calif . – August 5 , 2026 - Power Integrations ( NASDAQ : POWI ) today announced financial results for the quarter ended June 30 , 2026. Revenue for the second quarter was $ 118.9 million , up ten percent from the prior quarter and up three percent from the second quarter of 2025. GAAP net income for the second quarter was $ 9.8 million or $ 0.17 per diluted share compared to $ 0.06 per diluted share in the prior quarter and $ 0.02 per diluted share in the second quarter of 2025. Cash flow from operations for the second quarter was $ 22.0 million . In addition to its GAAP results , the company provided certain measures not calculated according to GAAP . Non- GAAP results exclude stock - based compensation , amortization of acquisition - related intangible assets , an accrual for a judgment in a legal matter , a restructuring charge recognized in the first quarter of 2026 and the tax effects of these items . Non - GAAP net income for the second quarter of 2026 was $ 20.9 million or $ 0.37 per diluted share compared to $ 0.25 per diluted share in the prior quarter and $ 0.35 per diluted share in the second quarter of 2025. A reconciliation of GAAP to non - GAAP financial results and outlook is included with the tables accompanying this press release . Power Integrations CEO Jen Lloyd commented : " We delivered strong second - quarter results , highlighted by continued growth in industrial markets , improved profitability , and lower inventories in the distribution channel and on our balance sheet . The demand drivers behind our business remain compelling , as investment in renewable energy , grid infrastructure and AI data centers drives customer demand for higher efficiency , reliability and power density . Our new 2200 V PowiGaN ™ technology extends our capabilities in high - voltage GaN and positions us to support customer roadmaps in these markets over the long term . " Power Integrations paid a dividend of $ 0.215 per share on June 30 , 2026 to stockholders of record as of May 29 , 2026. A dividend of $ 0.215 per share will be paid on September 30 , 2026 , to stockholders of record as of August 31 , 2026 . Financial Outlook The company issued the following outlook for the third quarter of 2026 : • Revenue is expected to be in a range of $ 122 million to $ 130 million . • • • GAAP gross margin is expected to be between 53.3 percent and 54.4 percent , and non - GAAP gross margin is expected to be between 54 percent and 55 percent . GAAP operating expenses are expected to be between $ 55 million and $ 56 million , and non - GAAP operating expenses are expected to be between $ 45 million and $ 46 million . GAAP operating margin is expected to be between 8.3 percent and 10.9 percent , and non - GAAP operating margin is expected to be between 17 percent and 19 percent .
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Conference Call Information and Supplemental Materials Power Integrations management will hold a conference call today at 1:30 p.m. Pacific time. A live webcast of the call will be available on the company's investor web page, http://investors.power.com, along with supplemental materials related to today’s earnings release. 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, conversion and consumption of power in applications ranging from milliwatts to megawatts in applications such as AI data centers, EVs and high-voltage DC infrastructure. For more information, please visit www.power.com. Note Regarding Use of Non-GAAP Financial Measures The non-GAAP measures provided in this press release, including non-GAAP earnings per diluted share, non- GAAP net income, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating margin, should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with generally accepted accounting principles (GAAP) in the United States. The non-GAAP financial measures are presented only as supplemental information to understand the Company’s operating results. 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, an accrual for a judgment in a legal matter, a restructuring charge recognized in the first quarter of 2026, and the tax effects of these items. The company considers these non-GAAP financial measures to be important because they provide additional insight into the company’s on-going performance; the company uses these measures in its financial and operational decision- making and, with respect to non-GAAP operating income, 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, to enable more meaningful and consistent period-to-period comparisons, and to facilitate comparability with the results of companies that provide similar measures. Non-GAAP measures have limitations as analytical tools, do not have any standardized meanings and are therefore unlikely to be comparable to similarly titled measures presented by other companies, 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. Reconciliations of non-GAAP measures to GAAP measures are attached to this press release. 2
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Note Regarding Forward-Looking Statements Certain statements included in this press release that are not historical facts are forward-looking statements within the meaning of the federal securities laws, including the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or the Company’s future financial or operating performance and are sometimes accompanied by words such as “believe,” “continue,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “predict,” “plan,” “may,” “should,” “will,” “would,” “potential,” “seem,” “seek,” “outlook,” and similar expressions that concern the Company’s expectations, strategy, priorities, plans, or intentions, predict or indicate future events or trends, or that are not statements of historical matters. Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Forward-looking statements in this press release include, without limitation, the Company’s outlook for the third quarter of 2026, the trends and assumptions underlying such outlook, including the continuation of growth and demand drivers, the Company's expectations regarding new technology, and the Company’s anticipated upcoming dividend, including the timing and amount of such dividend, among others. These statements are based on various assumptions, whether or not identified in this press release. These forward- looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by an investor as a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are very difficult or impossible to predict and will differ from the assumptions. Many actual events and circumstances are beyond the control of the Company. 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 the forward-looking statements in this press release, including but not limited to: (i) the risks that the demand drivers behind the Company’s business may not continue to the extent anticipated, or at all; (ii) the risks that the investments in renewable energy, grid infrastructure, and AI data centers may not drive Company customer demand to the extent or in the time frame anticipated, or at all; (iii) the risks that the Company’s new 2200 V PowiGaN™ technology may not extend the Company’s capabilities in high-voltage GaN nor position the Company to support customer roadmaps over the long term to the extent or in the time frame anticipated, or at all; (iv) the risks that the Company may not be in a position to pay the $0.215 per share dividend on September 30, 2026 as currently anticipated due to unforeseen circumstances; (v) the Company’s ability to forecast its performance; (vi) changes in trade policies, in particular the escalation and imposition of new and higher tariffs, which could reduce demand for end products that incorporate the Company's integrated circuits and/or place pressure on the Company's prices as the Company's customers seek to offset the impact of increased tariffs on their own products; (vii) the Company’s ability to supply products and its ability to conduct other aspects of its business, such as competing for new design wins; (viii) 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; (ix) 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; (x) 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; (xi) unforeseen costs and expenses, and unfavorable fluctuations in component costs or operating expenses resulting from changes in commodity prices and/or exchange rates; and (xii) product development delays and defects and market acceptance of the new products. These risks and uncertainties may be amplified by current or future global conflicts and current and potential trade restrictions, trade tensions, and tariffs, all of which continue to cause economic uncertainty. You should carefully consider the foregoing factors and the other risks and uncertainties, including those 3
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more fully described in the "Risk Factors" section of the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q that the Company has caused to be filed with the U.S. Securities and Exchange Commission, or the SEC, and other documents filed by the Company or that will be filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements in this press release are based only on information currently available to the Company and speak only as of the date they are made. Investors are cautioned not to put undue reliance on forward-looking statements, and the Company disclaims any obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. The Company gives no assurance that the Company will achieve any of its expectations. 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. 4
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POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per-share amounts) Three months ended Six months ended June 30,2026 March 31,2026 June 30,2025 June 30,2026 June 30,2025 Net revenue $ 118,939 $ 108,308 $ 115,852 $ 227,247 $ 221,381 Cost of revenue 54,302 51,370 51,898 105,672 99,192 Gross profit 64,637 56,938 63,954 121,575 122,189 Operating expenses: Research and development 27,163 26,255 25,991 53,418 50,086 Selling, general and administrative 28,052 24,444 30,157 52,496 57,579 Other operating expenses (income) 522 (1,419) 9,151 (897) 9,151 Restructuring and related charges — 6,204 — 6,204 — Total operating expenses 55,737 55,484 65,299 111,221 116,816 Income (loss) from operations 8,900 1,454 (1,345) 10,354 5,373 Other income 2,333 2,466 2,690 4,799 5,857 Income before income taxes 11,233 3,920 1,345 15,153 11,230 Provision for (benefit from) income taxes 1,400 620 (24) 2,020 1,071 NET INCOME $ 9,833 $ 3,300 $ 1,369 $ 13,133 $ 10,159 Earnings per share: Basic $ 0.18 $ 0.06 $ 0.02 $ 0.24 $ 0.18 Diluted $ 0.17 $ 0.06 $ 0.02 $ 0.23 $ 0.18 Shares used in per share calculation: Basic 55,748 55,506 56,274 55,627 56,571 Diluted 56,696 55,874 56,387 56,335 56,787 5
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POWER INTEGRATIONS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands) June 30,2026 December 31,2025 ASSETS Current assets: Cash and cash equivalents $ 70,612 $ 58,755 Short-term investments 192,001 190,755 Accounts receivable, net 26,778 18,254 Inventories 157,790 166,887 Prepaid expenses and other current assets 23,983 23,678 Total current assets 471,164 458,329 Property and equipment, net 142,143 146,536 Intangible assets, net 6,893 7,244 Goodwill 95,271 95,271 Other non-current assets 63,535 64,827 TOTAL ASSETS $ 779,006 $ 772,207 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 28,645 $ 33,963 Accrued payroll and related expenses 13,104 13,840 Other accrued liabilities 24,899 22,558 Total current liabilities 66,648 70,361 Long-term liabilities Other liabilities 31,830 29,001 TOTAL LIABILITIES 98,478 99,362 STOCKHOLDERS’ EQUITY: Common stock 20 20 Additional paid-in capital 20,230 — Accumulated other comprehensive loss (2,948) (1,105) Retained earnings 663,226 673,930 TOTAL STOCKHOLDERS' EQUITY 680,528 672,845 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 779,006 $ 772,207 6
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POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Three Months Ended Six Months Ended June 30,2026 June 30,2025 June 30,2026 June 30,2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 9,833 $ 1,369 $ 13,133 $ 10,159 Adjustments to reconcile net income to net cash provided by operatingactivities: Depreciation 6,239 7,002 12,619 14,246 Amortization of intangible assets 168 208 351 415 Loss on disposal of property and equipment 446 — 495 — Stock-based compensation expense 11,258 10,077 17,565 18,760 Accretion of discount on investments (144) (375) (300) (721) Deferred income taxes 711 1,683 1,758 (854) Decrease in accounts receivable allowance for credit losses — — — (381) Change in operating assets and liabilities: Accounts receivable (12,371) (4,777) (8,524) (30) Inventories 5,192 672 9,097 (2,784) Prepaid expenses and other assets 1,558 3,036 3,925 6,405 Accounts payable (3,138) (3,754) (7,210) 248 Other accrued liabilities 2,228 13,931 (884) 9,995 Net cash provided by operating activities 21,980 29,072 42,025 55,458 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (4,302) (5,926) (6,300) (11,652) Purchases of investments (9,269) (42,066) (24,076) (47,696) Proceeds from sales and maturities of investments 10,700 80,610 21,355 96,492 Net cash provided by (used in) investing activities (2,871) 32,618 (9,021) 37,144 CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock under employee stock plans — — 2,690 2,787 Repurchase of common stock — (32,560) — (55,658) Payments of dividends to stockholders (11,887) (11,809) (23,837) (23,768) Proceeds from borrowings on line of credit — 13,000 — 13,000 Repayments on line of credit — (13,000) — (13,000) Net cash used in financing activities (11,887) (44,369) (21,147) (76,639) NET INCREASE IN CASH AND CASH EQUIVALENTS 7,222 17,321 11,857 15,963 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 63,390 49,614 58,755 50,972 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 70,612 $ 66,935 $ 70,612 $ 66,935 7
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POWER INTEGRATIONS, INC. SUPPLEMENTAL INFORMATION (Unaudited) (in thousands) Three months ended Six months ended June 30,2026 March 31,2026 June 30,2025 June 30,2026 June 30,2025 Stock-based compensation expense included in: Cost of revenue $ 707 $ 469 $ 592 $ 1,176 $ 1,249 Research and development 3,036 1,904 3,190 4,940 5,440 Selling, general and administrative 6,993 3,526 6,295 10,519 12,071 Other operating expenses (income) 522 (1,419) — (897) — Restructuring and related charges — 1,827 — 1,827 — Total stock-based compensation expense $ 11,258 $ 6,307 $ 10,077 $ 17,565 $ 18,760 Cost of revenue includes: Amortization of acquisition-related intangibleassets $ 147 $ 147 $ 146 $ 294 $ 293 Three months ended Six months ended June 30,2026 March 31,2026 June 30,2025 June 30,2026 June 30,2025 Revenue Mix by End Market Communications 10 % 10 % 11 % 10 % 10 % Computer 11 % 11 % 12 % 11 % 12 % Consumer 36 % 38 % 37 % 37 % 41 % Industrial 43 % 41 % 40 % 42 % 37 % Six Months Ended June 30,2026 RECONCILIATION OF FREE CASH FLOW Cash flows from operations $ 42,025 Purchases of property and equipment (6,300) Free cash flow $ 35,725 8
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POWER INTEGRATIONS, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS (Unaudited) (in thousands, except per-share amounts) Three Months Ended Six Months Ended June 30,2026 March 31,2026 June 30,2025 June 30,2026 June 30,2025 RECONCILIATION OF GROSS PROFIT GAAP gross profit $ 64,637 $ 56,938 $ 63,954 $ 121,575 $ 122,189 GAAP gross margin 54.3 % 52.6 % 55.2 % 53.5 % 55.2 % Less: Stock-based compensation included in cost ofrevenue 707 469 592 1,176 1,249 Amortization of acquisition-related intangibleassets 147 147 146 294 293 Restructuring and related charges in cost ofrevenue (b) — 365 — 365 — Total 854 981 738 1,835 1,542 Non-GAAP gross profit $ 65,491 $ 57,919 $ 64,692 $ 123,410 $ 123,731 Non-GAAP gross margin 55.1 % 53.5 % 55.8 % 54.3 % 55.9 % Three Months Ended Six Months Ended June 30,2026 March 31,2026 June 30,2025 June 30,2026 June 30,2025 RECONCILIATION OF OPERATING EXPENSES GAAP operating expenses $ 55,737 $ 55,484 $ 65,299 $ 111,221 $ 116,816 Less: Stock-based compensation unrelated to restructuring 10,029 5,430 9,485 15,459 17,511 Other operating expenses (income) (a) 522 (1,419) 9,151 (897) 9,151 Restructuring and related charges (b) — 6,204 — 6,204 — Total 10,551 10,215 18,636 20,766 26,662 Non-GAAP operating expenses $ 45,186 $ 45,269 $ 46,663 $ 90,455 $ 90,154 9
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POWER INTEGRATIONS, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS (Unaudited) (in thousands, except per-share amounts) Three Months Ended Six Months Ended June 30,2026 March 31,2026 June 30,2025 June 30,2026 June 30,2025 RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS GAAP income (loss) from operations $ 8,900 $ 1,454 $ (1,345) $ 10,354 $ 5,373 GAAP operating margin 7.5% 1.3% (1.2%) 4.6% 2.4% Add: Stock-based compensation unrelated to restructuring 10,736 5,899 10,077 16,635 18,760 Amortization of acquisition-related intangible assets 147 147 146 294 293 Other operating expenses (income) (a) 522 (1,419) 9,151 (897) 9,151 Restructuring and related charges (b) — 6,569 — 6,569 — Total 11,405 11,196 19,374 22,601 28,204 Non-GAAP income from operations $ 20,305 $ 12,650 $ 18,029 $ 32,955 $ 33,577 Non-GAAP operating margin 17.1% 11.7% 15.6% 14.5% 15.2% Three Months Ended Six Months Ended June 30,2026 March 31,2026 June 30,2025 June 30,2026 June 30,2025 RECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXES GAAP provision for (benefit from) income taxes $ 1,400 $ 620 $ (24) $ 2,020 $ 1,071 GAAP effective tax rate 12.5% 15.8% (1.8%) 13.3% 9.5% Tax effect of adjustments to GAAP results (c) (363) (611) (871) (974) (632) Non-GAAP provision for income taxes $ 1,763 $ 1,231 $ 847 $ 2,994 $ 1,703 Non-GAAP effective tax rate 7.8% 8.1% 4.1% 7.9% 4.3% 10
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POWER INTEGRATIONS, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS (Unaudited) (in thousands, except per-share amounts) Three Months Ended Six Months Ended June 30,2026 March 31,2026 June 30,2025 June 30,2026 June 30,2025 RECONCILIATION OF NET INCOME PERSHARE (DILUTED) GAAP net income $ 9,833 $ 3,300 $ 1,369 $ 13,133 $ 10,159 Adjustments to GAAP net income: Total stock-based compensation unrelated torestructuring 10,736 5,899 10,077 16,635 18,760 Amortization of acquisition-related intangible assets 147 147 146 294 293 Other operating expenses (income) (a) 522 (1,419) 9,151 (897) 9,151 Restructuring and related charges (b) — 6,569 — 6,569 — Tax effect of adjustments to GAAP results (c) (363) (611) (871) (974) (632) Total 11,042 10,585 18,503 21,627 27,572 Non-GAAP net income $ 20,875 $ 13,885 $ 19,872 $ 34,760 $ 37,731 Average shares outstanding for calculation of non-GAAP net income per share (diluted) 56,696 55,874 56,387 56,335 56,787 GAAP net income per share (diluted) $ 0.17 $ 0.06 $ 0.02 $ 0.23 $ 0.18 Non-GAAP net income per share (diluted) $ 0.37 $ 0.25 $ 0.35 $ 0.62 $ 0.66 _____________________________________ (a) Other operating expenses (income) consists of stock-based compensation expense (benefit) resulting from modification of equity awards associated with an executive's employment transition and retirement arrangements as well as an accrual for a judgment in a legal matter. (b) Restructuring and related charges are associated with the Company's February 2026 restructuring action and consist primarily of employee severance. (c) Tax effect of items excluded from non-GAAP results relate to the tax effect of non-GAAP adjustments using a non-GAAP effective tax rate of 7.8% and 7.9% for the three and six months ended June 30, 2026, respectively. 11
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POWER INTEGRATIONS, INC. RECONCILIATION OF NON-GAAP MEASURES TO GAAP IN THIRD-QUARTER 2026 OUTLOOK (dollar amounts in millions) RECONCILIATION OF GROSS MARGIN OUTLOOK LOW HIGH GAAP gross margin outlook 53.3 % 54.4 % Adjustments to reconcile GAAP to non-GAAP Stock-based compensation included in cost of revenue 0.6 % 0.5 % Amortization of acquisition-related intangible assets 0.1 % 0.1 % Non-GAAP gross margin outlook 54.0 % 55.0 % RECONCILIATION OF OPERATING EXPENSE OUTLOOK LOW HIGH GAAP operating-expense outlook $ 55.0 $ 56.0 Adjustments to reconcile GAAP to non-GAAP Stock-based compensation (10.0) (10.0) Non-GAAP operating-expense outlook $ 45.0 $ 46.0 RECONCILIATION OF OPERATING MARGIN OUTLOOK LOW HIGH GAAP operating margin outlook 8.3 % 10.9 % Adjustments to reconcile GAAP to non-GAAP Stock-based compensation 8.6 % 8.0 % Amortization of acquisition-related intangible assets 0.1 % 0.1 % Non-GAAP operating margin outlook 17.0 % 19.0 % Contact: Joe Shiffler Power Integrations, Inc. (408) 414-8528 joe@power.com 12