Power Integrations (POWI) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $108.3 million, up 3% year-over-year and 5% sequentially, led by 23% industrial segment growth and a 17% sequential rebound in consumer revenue.

• Non-GAAP EPS was $0.25 per diluted share; GAAP net income was $3.3 million ($0.06 per share), impacted by $6.6 million in restructuring charges for a 7% workforce reduction.

• Strategic focus on customer centricity, operational efficiency, and high-growth markets such as EVs, AI data centers, and renewables, with new product launches including TOPSwitch M-GaN and TinySwitch-5.

• Leadership team strengthened with new SVP of Worldwide Sales; collaboration with NVIDIA and design wins in data center and EV markets.

• International sales accounted for 98% of revenue, with Asia representing about 80%.

Financial highlights

• Non-GAAP gross margin was 53.5%; GAAP gross margin was 52.6%, both at the midpoint of guidance.

• Non-GAAP operating margin was 11.7%; GAAP operating margin was 1.3%.

• Non-GAAP net income was $13.9 million; GAAP net income was $3.3 million.

• Free cash flow was $18 million; cash flow from operations was $20 million.

• Cash, cash equivalents, and investments totaled $257.2 million at quarter-end.

Outlook and guidance

• Q2 2026 revenue expected between $115 million and $120 million, with non-GAAP gross margin guidance of 54%–55% and operating margin of 13.5%–15.5%.

• Communications, computers, and industrial segments projected to grow sequentially; consumer expected to be flat to slightly up.

• OpEx to increase in Q2 due to annual merit increases, but to remain flat in the second half.

• Management expects international and Asia-region sales to remain a large portion of future revenue.

• Ongoing focus on operational efficiency and cost reduction, with flexibility to invest in growth areas.