Power Integrations(US:POWI)2025-02-07 21:10Financial Performance - Net revenues for 2024 were $418,973, a decrease of 5.7% from $444,538 in 2023[246]. - Gross profit for 2024 was $224,751, down from $228,956 in 2023, reflecting a gross margin of approximately 53.7%[246]. - Operating expenses increased to $206,822 in 2024, compared to $193,897 in 2023, primarily due to higher research and development costs[246]. - Net income for 2024 was $32,234, a decline of 42.2% from $55,735 in 2023[248]. - Basic earnings per share for 2024 were $0.57, down from $0.97 in 2023[246]. - The company reported a total comprehensive income of $30,673 for 2024, down from $61,617 in 2023[248]. - Net income for 2024 was $32,234,000, a decrease of 42.9% compared to $55,735,000 in 2023 and a significant drop from $170,851,000 in 2022[252]. - Total assets increased to $828,826 in 2024, compared to $819,868 in 2023[251]. - Total liabilities rose to $79,054 in 2024, up from $67,627 in 2023[251]. - Retained earnings decreased to $734,039 in 2024 from $753,680 in 2023[251]. - Cash and cash equivalents decreased to $50,972 in 2024 from $63,929 in 2023[251]. - The company reported a net decrease in cash and cash equivalents of $12,957,000 in 2024, compared to a decrease of $41,443,000 in 2023[252]. - Interest income for 2024 increased to $13.576 million, up from $11.655 million in 2023, reflecting improved cash management[368]. Market Risk and Currency Exposure - The company reported a significant exposure to market risk due to changes in interest rates, primarily related to its investment portfolio, which includes cash equivalents and short-term investments[221]. - The potential impact on pretax income from a 5% and 10% change in the value of the U.S. dollar compared to the Swiss franc and euro is estimated at $132,000 and $263,000 respectively[225]. - A 10% change in the value of the U.S. dollar compared to the Japanese yen could result in a corresponding change in gross margin of approximately 1.4%[229]. - The company has wafer supply agreements with major suppliers that are based in U.S. dollars, allowing for mutual sharing of exchange rate fluctuations[228]. - The company did not have an open foreign currency hedge program as of December 31, 2024, and 2023[227]. Investment and Securities - The company’s investment policy aims to mitigate default risk, market risk, and reinvestment risk by investing in high-credit quality securities[221]. - The company’s marketable securities primarily consisted of commercial paper, corporate bonds, and government securities as of December 31, 2024, with a focus on maintaining liquidity for strategic investments[277]. - The total fair value of the company's cash equivalents and marketable securities increased from $267,688 thousand at December 31, 2023 to $252,388 thousand at December 31, 2024[301]. - The company reported total marketable securities valued at $249,023 thousand as of December 31, 2024, with an amortized cost of $248,135 thousand, resulting in gross unrealized gains of $1,023 thousand and losses of $(135) thousand[302]. - The total marketable securities in a continuous unrealized loss position decreased from $128,130 thousand at December 31, 2023 to $47,021 thousand at December 31, 2024[304]. - The company did not recognize any unrealized losses on marketable securities in income for the years ended December 31, 2024 and 2023[304]. Research and Development - Research and development expenses for 2024 were $88,203 million, slightly up from $85,128 million in 2023, indicating a continued investment in innovation[368]. - The Company’s research and development costs are expensed as incurred, reflecting its commitment to innovation and product development[286]. Stock-Based Compensation - The company reported a stock-based compensation expense of $35,076,000 in 2024, which is an increase of 23.1% from $28,528,000 in 2023[252]. - Total stock-based compensation expense for the year ended December 31, 2024, was approximately $35.1 million, an increase from $28.5 million in 2023[316]. - The Company recognized stock-based compensation expense of approximately $12.6 million in research and development for the year ended December 31, 2024[315]. - As of December 31, 2024, the total unrecognized compensation expense related to unvested awards was $55.7 million[317]. Customer Concentration - The company's top ten customers accounted for approximately 79%, 80%, and 76% of revenues in 2024, 2023, and 2022, respectively[332]. - As of December 31, 2024, 87% of accounts receivable were concentrated with the company's top ten customers[334]. Acquisitions - The company acquired Odyssey Semiconductor Technologies for $9.52 million in cash, aimed at enhancing its high-power GaN switching technology[375]. - The company made an acquisition costing $9,520,000 in 2024, marking a strategic investment in growth[252]. - The company acquired in-process research and development valued at $4.9 million as part of the Odyssey acquisition, which will not commence amortization until development is completed[306]. Tax and Deferred Tax Assets - The effective tax rate for 2024 was -4.8%, significantly improved from -21.4% in 2023, primarily due to federal research tax credits and the release of uncertain tax positions[351]. - Deferred tax assets increased to $46.288 million in 2024 from $33.357 million in 2023, driven by capitalized R&D costs and tax credit carry-forwards[353]. - The company maintained a valuation allowance of $32.659 million as of December 31, 2024, indicating uncertainty regarding the realization of certain deferred tax assets[354]. - Unrecognized tax benefits decreased to $15.175 million in 2024 from $16.389 million in 2023, with a potential income tax benefit of $3.8 million if recognized[358]. Lease Obligations - Total lease expense for 2024 was $3.9 million, up from $3.6 million in 2023, reflecting ongoing operational commitments[361]. - The company reported right-of-use assets of $16.076 million and total lease liabilities of $15.560 million as of December 31, 2024[363]. - The weighted average remaining lease term increased to 5.8 years in 2024 from 3.8 years in 2023, indicating longer commitments[364]. Operational Segments - The company operates as a single reportable segment focused on the design, development, manufacture, and marketing of integrated circuits for high-voltage power conversion[365].