Key Highlights

  • Revenue was USD 125.48 million against a USD 126.03 million estimate, with non-GAAP EPS of USD 0.46 against USD 0.42.
  • GAAP Net Income was USD 18.3 million, or USD 0.32 per diluted share, against a USD 0.02 loss.
  • Q4 Revenue is guided at USD 118.0 million to USD 126.0 million and non-GAAP gross Margin at 54.5% to 55.5%.
  • The company plans a quarterly Dividend of USD 0.22 per share in each 2027 quarter, against USD 0.215 now.

Power Integrations (NASDAQ:POWI) opened its report with a fourth quarter outlook of revenue between USD 118.0 million and USD 126.0 million, alongside a dividend schedule that reaches into 2027. The company guided to GAAP gross margin of 54.0% to 55.0% and non-GAAP gross margin of 54.5% to 55.5%.

Guidance and Outlook for the Fourth Quarter

GAAP operating expenses are guided to USD 53.0 million to USD 54.0 million, and non-GAAP operating expenses to USD 42.5 million to USD 43.5 million. GAAP Operating Margin is guided to 10.0% to 12.0%, while non-GAAP operating margin is guided to 19.0% to 21.0%.

On Capital returns, the company paid a dividend of USD 0.215 per share on September 30, 2026. A further USD 0.215 per share is payable on December 31, 2026 to holders of record on November 30. For each of the four quarters of 2027, management stated a plan to pay a quarterly dividend of USD 0.22 per share.

The Quarter in Detail

Revenue was USD 125.48 million, compared with USD 118.9 million in the prior quarter and USD 118.9 million in the third quarter of 2025, with the company stating revenue was up 6% from a year earlier. Income from operations was USD 19.1 million, compared with a loss from operations of USD 4.0 million in the year-earlier quarter.

GAAP net income was USD 18.3 million, or USD 0.32 per diluted share, compared with USD 0.17 in the second quarter and a net loss of USD 0.02 per share a year earlier. Non-GAAP net income was USD 26.1 million, or USD 0.46 per diluted share, against USD 0.37 in the prior quarter and USD 0.36 a year ago. Non-GAAP results exclude stock-based compensation, amortization of acquisition-related intangibles, an accrual for a legal judgment, a first quarter 2026 restructuring charge and related tax effects.

Chief executive Jen Lloyd attributed the sequential revenue increase to PowiGaN products and to the industrial market, where revenue is up 13% year to date. She described power as becoming a critical constraint because of AI and electrification, and pointed to the company's high-voltage technology and product roadmap.

Markets, Cash and the Balance Sheet

By end market, industrial accounted for 43% of third quarter revenue, consumer 32%, computer 13% and communications 12%. A year earlier the mix was 42% industrial, 34% consumer, 13% computer and 11% communications.

Operating cash flow was USD 42.6 million in the quarter, against USD 29.9 million a year earlier. Dividends paid were USD 12.0 million. The company made no share repurchases in the quarter, compared with USD 42.4 million in the third quarter of 2025. Nine-month free cash flow was USD 72.2 million.

Cash and cash equivalents stood at USD 96.8 million and short-term investments at USD 191.3 million at September 30, against USD 58.8 million and USD 190.8 million at December 31. Inventories were USD 150.3 million against USD 166.9 million.

Signposts for the Next Quarter

Third quarter revenue of USD 125.5 million sits alongside a fourth quarter range of USD 118.0 million to USD 126.0 million, and non-GAAP EPS of USD 0.46 sits alongside non-GAAP operating margin guidance of 19.0% to 21.0%. Cash of USD 96.8 million sits alongside a quarterly dividend of USD 0.215 per share.

Management named a short list of dated items: the December 31, 2026 dividend payment, the USD 0.22 quarterly rate for each quarter of 2027, and the fourth quarter margin and expense guidance. It also pointed to PowiGaN, industrial Demand and AI Data Center power as the areas guiding its product roadmap.