Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2021 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ Commission File Number 000-23441 POWER INTEGRATIONS, INC. (Exact name of registrant as specified in its charter) | Delaware | ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 000-23441 POWER INTEGRATIONS, INC. (Exact name of registrant as specified in its charter) | Delaware | 94-3065014 | | --- | --- | | (State or other jurisdi ...

NEWS RELEASE Power Integrations Reports Fourth-Quarter and Full-Year Financial Results Quarterly revenues increased 32 percent year-over-year to $150.7 million; GAAP earnings were $0.45 per diluted share; non-GAAP earnings were $0.60 per diluted share Full-year revenues grew 16 percent to $488.3 million; cash flow from operations was $125.6 million; quarterly dividend increases by 18 percent to $0.13 per share SAN JOSE, CALIF. – February 2, 2021 – Power Integrations (Nasdaq: POWI) today announced financial ...

Financial Data and Key Metrics Changes - Fourth quarter revenues increased 32% year-over-year to $151 million, exceeding expectations [5] - Non-GAAP operating margin expanded to 25%, with non-GAAP earnings at $0.60 per diluted share [5][17] - Cash flow from operations for the fourth quarter was $46 million, with capital expenditures of $35 million [19] Business Line Data and Key Metrics Changes - Consumer category, the largest end market, grew nearly 20% year-over-year in Q4, driven by robust demand in appliances [6] - Communications category grew more than 30% for the year, with significant contributions from fast charging for smartphones [9][17] - Industrial category saw low single-digit growth, constrained by pandemic-related delays, but is expected to benefit from secular trends [8][9] Market Data and Key Metrics Changes - Revenue mix for the quarter was 34% communication, 31% consumer, 26% industrial, and 9% computer [18] - The company expects first quarter revenues to be flat compared to Q4, with continued strength in cell phones offsetting seasonal declines in other categories [21] Company Strategy and Development Direction - The company is focusing on GaN products, which are gaining traction and expected to double or triple in revenue in 2021 [47][49] - Investments in R&D and capacity expansion are prioritized, with over $70 million spent on capital last year [12][19] - The company is strategically managing inventory to meet customer demand while avoiding excess stock [13][38] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges due to the pandemic but remains optimistic about long-term growth in high power and renewable energy sectors [27] - The company anticipates a potential slowdown in cell phone demand but expects to gain market share from competitors [21][60] - Management expects gross margin to be around 50% for the full year, despite short-term fluctuations [22] Other Important Information - The quarterly dividend was increased to $0.13 per share, marking a total increase of 37% over the past four quarters [5] - The company is undergoing a leadership transition in operations, with Sunny Gupta taking over from Raja Petrakian [14][15] Q&A Session Summary Question: Visibility for the high power area of the industrial business - Management expects industrial segment growth but acknowledges pandemic-related delays may slow project resumption [26][27] Question: Impact of rising input costs on margin outlook - Prices have firmed but not increased; costs have slightly risen due to capacity pushes [28][29] Question: Dynamics of multi-port chargers and their impact on business - Multiple ports increase ASP significantly, benefiting from GaN products [31][32] Question: Supply constraints affecting revenue growth - Management believes they can meet customer demand and maintain capacity [37][38] Question: Seasonality shifts in the wireless side - The impact of out-of-the-box chargers is uncertain, but long-term prospects are positive [40][42] Question: Importance and growth of GaN products - GaN revenue is expected to double or triple in 2021, with significant inroads into OEM business [46][47] Question: Automotive segment design cycles - Long design cycles in automotive mean revenue from this segment will take time to materialize [50] Question: Visibility on inventory replenishment - Management anticipates potential channel replenishment in Q1, depending on demand post-Lunar New Year [64]

ls" Magic Strip Power Integrations, Inc. Nasdaq: POWI o ු 0 () December 2020 ac-dc converters led drivers Forward-Looking Statements/Non-GAAP Metrics These slides accompany an oral presentation by Power Integrations, Inc., which contains forward-looking statements. Each statement relating to events that will or may occur in the future is a forward-looking statement. The Company's actual 2 results may differ materially from those suggested in the presentation. Information concerning factors that could cause ...

Financial Data and Key Metrics Changes - Q3 revenues were $121 million, up 13% sequentially and above the top end of guidance, with a forecast for Q4 revenues of $130 million, plus or minus $5 million [8][19] - Non-GAAP gross margin decreased by 80 basis points to 50.3% due to a revenue mix shift towards lower-margin categories [22] - Non-GAAP earnings were $0.40 per diluted share, with cash flow from operations at $16.2 million [23][24] Business Line Data and Key Metrics Changes - Computer category revenues grew over 75% sequentially, driven by demand for inbox fast chargers for tablets [19] - Communication revenues increased by about 25% sequentially, while consumer revenues rose in the mid-teens, and industrial revenues declined in high single digits [20] - Revenue mix for the quarter was 32% communication, 31% consumer, 28% industrial, and 9% computer [22] Market Data and Key Metrics Changes - Strong demand in the consumer category was driven by appliances, while the communications sector benefited from trends in the smartphone market [9][10] - Channel inventories fell sharply, ending September at 4.3 weeks, down three weeks compared to the prior quarter [25] Company Strategy and Development Direction - The company is focused on expanding its GaN product offerings and expects to double GaN product revenue this year, with potential for further doubling in 2021 [16][96] - The company anticipates that fast charging will be the largest contributor to growth in Q4 and expects continued success in this area in 2021 [14][15] - The automotive market is seen as a long-term opportunity, with gradual revenue increases expected over the next several years [55][56] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains uncertain due to the pandemic, but they expect a rebound in demand for appliances and continued strength in fast charging [19][26] - The company is optimistic about the growth potential in the computer market, driven by work-from-home trends and new design wins [84][85] - Management highlighted that the fast charging market is expanding into lower-end smartphones, which will contribute to revenue growth [71][72] Other Important Information - The company paid out $6.6 million in dividends following a dividend increase announced in conjunction with a stock split [24] - Capital expenditures for the quarter were $14.1 million, primarily for building construction and capacity additions [23][91] Q&A Session Summary Question: How is seasonality expected to behave in Q1? - Management indicated that Q1 could be slightly higher than normal due to strong sell-through in appliances and communications [35][36] Question: What are the expectations for OpEx growth relative to revenue growth in 2021? - Management provided a framework suggesting a slight increase in OpEx, with revenue growth expected to be in the low double digits [38] Question: Is GaN penetrating non-smartphone applications faster than expected? - Management expressed enthusiasm about design activity in non-smartphone applications, noting significant interest in areas like TVs and refrigerators [44] Question: What is the outlook for the automotive market? - Management stated that the automotive market will take several years to develop, but they are well-positioned for future growth [55][56] Question: How does the competitive landscape look with recent partnerships in high-voltage applications? - Management noted that they do not compete in the high-voltage market but have been gaining share in lower power levels against competitors [64] Question: What is the growth outlook for the computer market? - Management expects continued growth in the computer market, driven by strong demand for tablets and new design wins in notebooks [84][85]

IS™ g Magic Strip Power Integrations, Inc. Nasdaq: POWI o ු 0 () October 2020 ac-dc converters led drivers Forward-Looking Statements/Non-GAAP Metrics These slides accompany an oral presentation by Power Integrations, Inc., which contains forward-looking statements. Each statement relating to events that will or may occur in the future is a forward-looking statement. The Company's actual 2 results may differ materially from those suggested in the presentation. Information concerning factors that could cause ...

IS™ Power Integrations, Inc. Nasdaq: POWI Q 0 0 (3) September 2020 ac-dc converters led drivers Forward-Looking Statements/Non-GAAP Metrics These slides accompany an oral presentation by Power Integrations, Inc., which contains forward-looking statements. Each statement relating to events that will or may occur in the future is a forward-looking statement. The Company's actual 2 results may differ materially from those suggested in the presentation. Information concerning factors that could cause such a dif ...

Financial Data and Key Metrics Changes - Q2 revenues were $106.8 million, up 4% year-over-year, in line with guidance despite a challenging demand environment [8][24] - Non-GAAP gross margin fell 150 basis points sequentially to 51.1% due to a shift in revenue mix [26] - Non-GAAP earnings were $0.66 per diluted share, with cash and investments increasing by about $23 million during the quarter [28][34] Business Line Data and Key Metrics Changes - Industrial revenues accounted for 35% of sales, growing high single digits year-over-year, driven by broad-based industrial applications [8][26] - Communications revenues grew more than 20% year-over-year, primarily due to the adoption of fast chargers for mobile devices [13][25] - Consumer revenues declined at a double-digit rate year-over-year, significantly impacted by the pandemic and inventory corrections [18][24] Market Data and Key Metrics Changes - The consumer market is expected to remain flat sequentially in Q3, with air conditioning sales particularly affected by seasonality [19][61] - The company anticipates a gradual recovery in the consumer market post-pandemic, driven by increasing electronic content in appliances and energy efficiency requirements [19][63] - The company maintains an elevated level of inventory to prepare for a potential recovery in demand [21][65] Company Strategy and Development Direction - The company is aggressively pursuing low power opportunities in electric vehicles and has qualified several products for automotive use [12][18] - The focus on GaN technology is expected to drive growth in the fast-charging market, with significant design wins anticipated [17][75] - The company is maintaining a cautious outlook on the demand environment due to the pandemic but is preparing for a potential recovery [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth prospects in the industrial and communications sectors, despite short-term challenges [10][63] - The company expects revenues to increase sequentially in Q3, driven by growth in fast-charging and communication categories [22][31] - Management noted that the high-power market is expected to recover in the long run, despite current softness due to pandemic-related delays [10][41] Other Important Information - The Board approved a two-for-one stock split, with the additional shares to be distributed on August 18 [34][35] - The company plans to maintain a minimum level of activity at foundries to help sustain capacity, despite slowing wafer starts [30][65] Q&A Session Summary Question: Automotive revenue expectations - Management indicated that some revenue from low power products is expected next year, but significant revenue won't materialize until 2023 or 2024 [39] Question: Communications design wins - The majority of new inbox designs are in the 20 to 30-watt range, with fast charging being adopted across various phone segments, including mid and low-end models [40] Question: Industrial business outlook - Industrial revenues are expected to remain flat in Q3, with no significant changes anticipated [48] Question: Gross margin sustainability - Management expects gross margins to remain in the range of 50.5% to 51% for Q3, supported by cost improvements [54][55] Question: Consumer market seasonality - The consumer market is projected to recover slightly in the second half of the year, but air conditioning seasonality may offset this [61] Question: Inventory levels - Internal inventory levels are primarily in wafer form, and the company plans to adjust wafer purchases gradually to maintain capacity [65] Question: 5G handsets and power levels - The company noted that 5G phones are likely to require higher power fast chargers, with power levels increasing from 20 watts to 30 watts [70] Question: GaN-based product revenue trends - Revenue from GaN-based products is expected to double this year and potentially increase even more next year based on design wins [77]

Power Integrations, Inc. (NASDAQ:POWI) Q1 2020 Results Conference Call May 7, 2020 4:30 PM ET Company Participants Joe Shiffler - Director, Investor Relations Balu Balakrishnan - President and CEO Sandeep Nayyar - Chief Financial Officer Conference Call Participants Ross Seymore - Deutsche Bank David Williams - Loop Capital Jeremy Kwan - Stifel Christopher Rolland - Susquehanna Operator Thank you for standing by, and welcome to the Power Integrations First Quarter Earnings Call. [Operator Instructions] I'd ...