Quarterly revenues increased 15 percent year-over-year to $172.7 million; GAAP earnings were $0.66 per diluted share; non-GAAP earnings were $0.83 per diluted share

Full-year revenues grew 44 percent to $703.3 million; full-year GAAP earnings were $2.67 per diluted share; non-GAAP earnings grew 92 percent to $3.26 per diluted share

Full-year cash flow from operations was $230.9 million; $100M added to repurchase authorization; quarterly dividend rises by 20 percent to $0.18 per share

SAN JOSE, Calif. — (BUSINESS WIRE) — February 3, 2022 — Power Integrations (Nasdaq: POWI) today announced financial results for the quarter and year ended December 31, 2021. Net revenues for the fourth quarter of 2021 were $172.7 million, down two percent compared to the prior quarter and up 15 percent from the fourth quarter of 2020. Net income for the fourth quarter was $40.7 million or $0.66 per diluted share compared to $0.69 per diluted share in the prior quarter and $0.45 per diluted share in the fourth quarter of 2020. Cash flow from operations for the fourth quarter was $47.2 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 fourth quarter of 2021 was $50.9 million or $0.83 per diluted share compared with $0.84 per diluted share in the prior quarter and $0.60 per diluted share in the fourth quarter of 2020. A reconciliation of GAAP to non-GAAP financial results is included with the tables accompanying this press release.

For the full year, net revenues were $703.3 million, an increase of 44 percent compared to the prior year. Net income was $164.4 million or $2.67 per diluted share, compared to $1.17 per diluted share in the prior year. Non-GAAP net income was $200.2 million or $3.26 per diluted share, up 92 percent compared to $1.70 per diluted share in the prior year. Cash flow from operations for the year was $230.9 million.

Commented Balu Balakrishnan, president and CEO of Power Integrations: “We capped an outstanding year with another strong quarter, and we are excited about the opportunities ahead. The secular trends underpinning our 2021 results—including energy efficiency, electrification, smart homes and appliances, and advanced chargers—remain in full effect for 2022. Our highly integrated GaN products are driving a revolution in smartphone and notebook chargers, and we expect a wide range of impressive new designs to come to market in the year ahead. Our BridgeSwitch™ motor-drive ICs are ramping at top-tier appliance customers, adding a new revenue stream for 2022. Our manufacturing model and our investments in capacity have been competitive advantages for us in this supply-constrained environment, and we are well positioned in terms of inventory and capacity to support strong demand in 2022.”

Additional Highlights

• Power Integrations repurchased approximately 423,000 shares of its common stock during the fourth quarter and approximately 820,000 shares in January, exhausting the $105 million remaining on the company’s repurchase authorization. The company’s board of directors has subsequently allocated an additional $100 million for share repurchases.
• The company paid a cash dividend of $0.15 per share on December 31, 2021. The company’s board of directors has declared a dividend of $0.18 per share to be paid on March 31, 2022 to stockholders of record as of February 28, 2022.

Financial Outlook

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

• Revenues are expected to be $180 million plus or minus $5 million.
• Gross margins are expected to be similar to the levels of the prior quarter.
• GAAP operating expenses are expected to be between $48.5 million and $49.5 million; non-GAAP operating expenses are expected to be between $40.5 million and $41.5 million. Non-GAAP expenses are expected to exclude approximately $7.8 million of stock-based compensation and $0.2 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 first-quarter financial performance, secular trends remaining in full effect, adoption of GaN products, new designs coming to market and its ability to support strong demand in 2022 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 conditions, including changing tariffs and uncertainty regarding 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 5, 2021. The company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law.