Power Integrations’ fourth quarter results met Wall Street’s revenue expectations, but the market responded negatively, reflecting ongoing challenges in certain business segments. Management attributed the modest year-over-year sales decline to lingering excess appliance inventory in the U.S. and persistent headwinds in the consumer and housing markets. CEO Jennifer Lloyd noted, “Our broader view is that appliance demand continues to face headwinds, including low existing home sales in the U.S., the effect of tariffs on appliance prices and ongoing softness in China housing.” The company’s focus on operational expense control and workforce restructuring was also highlighted as a response to these pressures.
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Power Integrations (POWI) Q4 CY2025 Highlights:
- Revenue: $103.2 million vs analyst estimates of $103 million (1.9% year-on-year decline, in line)
- Adjusted EPS: $0.23 vs analyst estimates of $0.19 (19.5% beat)
- Adjusted EBITDA: $16.64 million vs analyst estimates of $17.8 million (16.1% margin, 6.5% miss)
- Revenue Guidance for Q1 CY2026 is $106.5 million at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 8.5%, up from 3.7% in the same quarter last year
- Inventory Days Outstanding: 313, up from 277 in the previous quarter
- Market Capitalization: $2.68 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Power Integrations’s Q4 Earnings Call
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Ross Seymore (Deutsche Bank) asked about inventory reduction plans and the timeline for returning to healthier channel levels. CFO Nancy Erba responded that lowering inventory is a key objective, tied to the pace of bookings and business mix in early 2026.
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Seymore (Deutsche Bank) also questioned when high-power, automotive, and data center contributions would become meaningful for revenue. CEO Jennifer Lloyd said high-power is already significant, but automotive and data center will require more time due to market delays and gradual design win conversion.
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David Williams (Benchmark) inquired about the demand environment and whether the business cycle is at a turning point. Lloyd explained that while industrial and some consumer bookings have improved, overall consumer demand remains uncertain and is sensitive to macroeconomic factors.
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Tore Svanberg (Stifel) sought clarity on the automotive segment’s revenue potential in the coming year. Lloyd and Erba indicated that meaningful contributions from automotive are more likely in 12 to 18 months, given current market dynamics and project delays.
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Christopher Rolland (Susquehanna) asked about product opportunities beyond auxiliary power in data centers. Lloyd said main power supply applications are in development, representing a larger addressable market for Power Integrations’ GaN and silicon solutions.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace of inventory reduction and normalization in both channel and finished goods, (2) sustained growth in industrial and high-power product lines amid electrification and renewable energy trends, and (3) early signs of commercial traction in automotive and AI data center markets. Progress in R&D prioritization and the impact of recent organizational changes will also be important indicators of execution.
Power Integrations currently trades at $48.51, up from $47.20 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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