Power Integrations, Inc.

Q1 revenue was $108.3 million, up 3% year over year and 5% versus Q4. Non-GAAP gross margin was 53.5%, up 20 basis points sequentially. Non-GAAP operating expenses were $45.3 million, and non-GAAP operating margin was 11.7%, up 200 basis points from the prior quarter. Non-GAAP net income was $13.9 million, or $0.25 per diluted share. Free cash flow was $18 million, cash flow from operations was $20 million, and CapEx was $2 million. On the balance sheet, inventory declined by $4 million and days on hand fell 21 days to 292, while channel inventory declined to 8.9 weeks. For Q2, management guided revenue to $115 million to $120 million, non-GAAP gross margin to 54% to 55%, OpEx to about $47 million plus or minus $0.5 million, and non-GAAP operating margin to 13.5% to 15.5%.

Jen Lloyd said the quarter started well and stressed that industrial remained the main growth driver while consumer recovered sequentially as tariff-related appliance pull-ins rolled off. Her strategic message centered on three themes: closer alignment with customers, a streamlined product pipeline, and organizational changes to improve operational effectiveness. She sounded optimistic about long-term opportunities in automotive, data center, industrial high-power, and refreshed legacy product families like TinySwitch and TOPSwitch.

Nancy Erba framed Q1 as a solid start with results at or better than outlook, citing revenue of $108.3 million, non-GAAP gross margin of 53.5%, operating expenses of $45.3 million, and non-GAAP operating margin of 11.7%. She noted $18 million of free cash flow, $20 million of cash from operations, and $2 million of CapEx, while saying the 2026 plan still calls for CapEx at 5% to 6% of revenue. She also said inventory fell by $4 million, days on hand dropped to 292, channel inventory moved to 8.9 weeks, and the company expects more improvement through the year.

Analysts pressed on weak compute/comms demand, especially in March, and management said those are smaller areas that should seasonally improve in Q2, but are not being deemphasized. On consumer/appliances, Nancy said Q2 would be only modestly up or essentially flat, with air conditioning seasonality offset by appliance weakness. Questions on AI/data center focused on where GaN fits and timing; Jen said aux power and solid-state transformer opportunities are nearer term, while higher-voltage 800V data center opportunities are a couple of years out, with the broader data center TAM expected to exceed $1 billion by 2030.