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What changed in POWER INTEGRATIONS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of POWER INTEGRATIONS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+324 added−266 removedSource: 10-K (2026-02-06) vs 10-K (2025-02-07)

Top changes in POWER INTEGRATIONS INC's 2025 10-K

324 paragraphs added · 266 removed · 213 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

66 edited+12 added−24 removed58 unchanged
Biggest changeWe intend to satisfy the disclosure requirements of Form 8-K regarding an amendment to, or a waiver from, a provision of our code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting such information on our investor website listed above.
Biggest changeWe intend to satisfy the disclosure requirements of Form 8-K regarding an amendment to, or a waiver from, a provision of our code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting such information on our investor website listed above. ​ Information About Our Executive Officers As of January 30, 2026, our executive officers, who were appointed by and serve at the discretion of our board of directors, were as follows: ​ ​ ​ ​ ​ Name ​ ​ ​ Position With Power Integrations ​ ​ ​ Age Jennifer Lloyd President, Chief Executive Officer and Director 58 Nancy Erba ​ Chief Financial Officer ​ 59 Sunny Gupta Senior Vice President, Operations 53 Gagan Jain ​ Vice President, Worldwide Sales ​ 48 ​ Jennifer Lloyd, PhD , has served as president, chief executive officer and as a director of Power Integrations since July 2025; she also previously served as a member of the board of directors from April 2021 through October 2022.
Market Category Primary Applications Communications ​ Mobile-phone chargers, broadband modems, wi-fi routers, other network and telecom gear Computer ​ Desktop PCs and monitors, servers, adapters for tablets and notebook computers, other computer peripherals Consumer ​ Major and small appliances, air conditioners and other comfort appliances, TVs and set-top boxes, video-game consoles Industrial ​ Industrial controls, LED lighting, utility meters, motor controls, uninterruptible power supplies, battery-powered tools, networked thermostats, power strips and other “smart home” devices, industrial motor drives, renewable energy systems, electric locomotives, electric passenger cars and commercial vehicles, high-voltage DC transmission systems ​ Sales, Distribution and Marketing We sell our products to original equipment manufacturers, or OEMs, and merchant power-supply manufacturers through our direct sales staff and a worldwide network of independent sales representatives and distributors.
Market Category ​ ​ ​ Primary Applications Communications ​ Mobile-phone chargers, broadband modems, wi-fi routers, other network and telecom gear Computer ​ Desktop PCs and monitors, servers, adapters for tablets and notebook computers, other computer peripherals Consumer ​ Major and small appliances, air conditioners and other comfort appliances, TVs and set-top boxes, video-game consoles Industrial ​ Industrial motor drives, renewable energy systems, electric locomotives, electric passenger cars and commercial vehicles, high-voltage DC transmission systems, industrial controls, utility meters, motor controls, uninterruptible power supplies, LED lighting, battery-powered tools and lawn equipment, networked thermostats, power strips and other “smart home” devices ​ ​ Sales, Distribution and Marketing We sell our products to original equipment manufacturers, or OEMs, and merchant power-supply manufacturers through our direct sales staff and a worldwide network of independent sales representatives and distributors.
The CEC standards were implemented nationwide in the United States in July 2008 as a result of the Energy Independence and Security Act of 2007 (“EISA”); these federal standards were tightened in 2016. Similar standards for external power supplies took effect in the European Union in 2010 as part of the EU’s EcoDesign Directive for Energy-Related Products.
The CEC standards were implemented nationwide in the United States in July 2008 as a result of the Energy Independence and Security Act of 2007 (“EISA”); these federal standards were tightened in 2016. Similar standards for external power supplies took effect in the European Union (“EU”) in 2010 as part of the EU’s EcoDesign Directive for Energy-Related Products.
Investor Information We make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act as soon as reasonably practicable after filing this material electronically or otherwise furnishing it to the SEC.
We make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act as soon as reasonably practicable after filing this material electronically or otherwise furnishing it to the SEC.
In high-power systems such as industrial motor drives, electric locomotives and renewable-energy systems, power conversion is typically performed using arrays of high-power silicon transistors known as IGBT modules; these modules are operated by electronic circuitry known as gate drivers (or IGBT drivers), whose function is to ensure accurate, safe and reliable operation of the IGBT modules.
In high-power systems such as industrial motor drives, electric locomotives and renewable-energy systems, power conversion is typically performed using arrays of high-power silicon or silicon-carbide transistors known as IGBT modules or SiC modules; these modules are operated by electronic circuitry known as gate drivers, whose function is to ensure accurate, safe and reliable operation of the IGBT modules.
Such controller chips are produced by a large number of vendors, including those listed above as well as others including NXP Semiconductors, Diodes Inc., On-Bright Electronics, MediaTek Inc., Renesas Electronics and, in recent years, an increasing number of Chinese suppliers such as Southchip Semiconductor, Chipown Microelectronics and Hangzhou Silan Microelectronics Co.
Such controller chips are produced by a large number of vendors, including those listed above as well as others including NXP Semiconductors, Texas Instruments, Diodes Inc., On-Bright Electronics, MediaTek Inc., Renesas Electronics, and, in recent years, an increasing number of Chinese suppliers such as Southchip Semiconductor, Chipown Microelectronics and Hangzhou Silan Microelectronics Co.
In 2019 we began incorporating our proprietary PowiGaN ™ gallium-nitride transistors in some of our products, enabling a higher level of energy efficiency than ICs with silicon transistors. Since then, we have introduced a variety of new products utilizing GaN technology, and developed new generations of our GaN technology capable of supporting voltages as high as 1700 volts.
In 2019 we began incorporating our proprietary PowiGaN ™ transistors in some of our products, enabling a higher level of energy efficiency than ICs with silicon transistors. Since then, we have introduced a variety of new products utilizing GaN technology and developed new generations of our GaN technology capable of supporting voltages as high as 1700 volts.
We try to carry a substantial amount of wafer and finished-goods inventory to help offset these risks and to better serve our markets and meet customer demand. 10 Table of Contents Competition Competing alternatives to our high-voltage ICs for the power-supply market include monolithic and hybrid ICs from companies such as STMicroelectronics, Infineon Technologies and Sanken Electric Company, as well as PWM-controller chips paired with discrete high-voltage silicon or GaN transistors.
We try to carry a substantial amount of wafer and finished-goods inventory to help offset these risks and to better serve our markets and meet customer demand. ​ Competition Competing alternatives to our high-voltage ICs for the power-supply market include monolithic and hybrid ICs from companies such as STMicroelectronics, Infineon Technologies and Sanken Electric Company, as well as PWM-controller chips paired with discrete high-voltage silicon or GaN transistors.
Most of our distributors are entitled to return privileges based on revenues and are protected from price reductions affecting their inventories. Our distributors are not subject to minimum purchase requirements, and sales representatives and distributors can discontinue marketing our products at any time. Our sales are primarily made pursuant to standard purchase orders.
Most of our distributors are entitled to return privileges based on revenue and are protected from price reductions affecting their inventories. Our distributors are not subject to minimum purchase requirements, and sales representatives and distributors can discontinue marketing our products at any time. Our sales are primarily made pursuant to standard purchase orders.
Changes in environmental laws and regulations could require us to alter our manufacturing processes or use substitute materials. Our failure to comply with laws, rules and regulations could subject us to future liabilities. See also our risk factors under Part 1. Item 1A.
Changes in environmental laws and regulations could require us to alter our manufacturing processes or use substitute materials. Our failure to comply with laws, rules and regulations could subject us to future liabilities. See also our risk factors under Part I. Item 1A.
For example: our EcoSmart™ technology drastically reduces the amount of energy consumed by electronic products when they are plugged in but not in use; our PowiGaN™ gallium-nitride (“GaN”) transistors reduce energy consumption compared to silicon transistors; and our BridgeSwitch™ motor-driver ICs provide highly efficient power conversion for BLDC motors in appliances and industrial applications.
For example: our EcoSmart™ technology drastically reduces the amount of energy consumed by electronic products when they are plugged in but not in use; our PowiGaN™ transistors reduce energy consumption compared to silicon transistors; and our BridgeSwitch™ motor-driver ICs provide highly efficient power conversion for BLDC motors in appliances and industrial applications.
We also provide extensive hands-on design support as well as online design tools, such as our PI Expert design software, that further reduce time-to-market and product development risks. 6 Table of Contents ● Energy Efficiency Our EcoSmart technology improves the energy efficiency of electronic devices during normal operation as well as standby and “no-load” conditions.
We also provide extensive hands-on design support as well as online design tools, such as our PI Expert design software, that further reduce time-to-market and product development risks. ● Energy Efficiency Our EcoSmart ™ technology improves the energy efficiency of electronic devices during normal operation as well as standby and “no-load” conditions.
We expect such applications to include power supplies used in data centers delivering artificial intelligence (AI) services, in communications network infrastructure equipment and in onboard-charging circuitry for EVs, among others.
We expect such applications to include power supplies used in data centers delivering artificial intelligence (“AI”) services, in communications network infrastructure equipment and in onboard-charging circuitry for EVs, among others.
Investors may obtain free electronic copies or request paper copies of these reports via the “For Investors” section of our website, www.power.com . Our website address is provided solely for informational purposes. We do not intend, by this reference, that our website should be deemed to be part of this Annual Report.
Investors may obtain free electronic copies or request paper copies of these reports via the “For Investors” section of our website. Our website address is provided solely for informational purposes. We do not intend, by this reference, that our website should be deemed to be part of this Annual Report.
Like discrete power supplies, discrete gate drivers tend to be highly complex, requiring a large number of components and a great deal of design expertise. Our Highly Integrated Approach In 1994 we introduced TOPSwitch, the industry’s first cost-effective high-voltage IC for switched-mode AC-DC power supplies.
Like discrete power supplies, discrete gate drivers tend to be highly complex, requiring a large number of components and a great deal of design expertise. In 1994 we introduced TOPSwitch ™ , the industry’s first cost-effective high-voltage IC for switched-mode AC-DC power supplies.
We offer health, dental and vision insurance, covering 85% of 11 Table of Contents the cost of employee health insurance in 2024, flexible spending accounts for healthcare and child-care expenses, matching 401(k) contributions (at a rate of 50% of the employee contribution, up to a maximum of 4% of the employee’s eligible compensation), employee stock plans, paid vacation and family leave, life and disability insurance, flu vaccinations, tuition reimbursement, charitable gift matching, health-and-wellness programs designed to promote physical well-being and other mental health services.
We offer health, dental and vision insurance, covering 85% of the cost of employee health insurance in 2025, flexible spending accounts for healthcare and child-care expenses, matching 401(k) contributions (at a rate of 50% of the employee contribution, up to a maximum of 4% of the employee’s eligible compensation), employee stock plans, paid vacation and family leave, life and disability insurance, flu vaccinations, tuition reimbursement, charitable gift matching, health-and-wellness programs designed to promote physical well-being and other mental health services.
In July 2024 we acquired the assets of Odyssey Semiconductor, a developer of so-called vertical GaN technology, in an effort to accelerate our development of higher-power GaN devices.
In July 2024 we acquired the assets of Odyssey Semiconductor, a developer of vertical GaN technology, in an effort to accelerate our development of higher-power GaN devices.
For example, the ENERGY STAR® program and the European Union Code of Conduct encourage manufacturers of electronic devices to comply with voluntary energy-efficiency specifications. In 2007 the California Energy Commission (“CEC”) implemented mandatory efficiency standards for external power supplies.
For example, the ENERGY STAR® program and the European Union Code of Conduct 7 Table of Contents encourage manufacturers of electronic devices to comply with voluntary energy-efficiency specifications. In 2007 the California Energy Commission (“CEC”) implemented mandatory efficiency standards for external power supplies.
We also hold trademarks in the U.S. and various other geographies including Brazil, China, the European Union, Hong Kong, India, Japan, Korea, Russia, Switzerland, Taiwan, Turkey, and the United Kingdom. We regard as proprietary some equipment, processes, information and knowledge that we have developed and used in the design and manufacture of our products.
We also hold trademarks in the U.S. and various other geographies including Bangladesh, Brazil, China, the EU, Hong Kong, India, Japan, Korea, Russia, Switzerland, Taiwan, Turkey, and the United Kingdom. We regard as proprietary some equipment, processes, information and knowledge that we have developed and used in the design and manufacture of our products.
In 2022, 2023 and 2024 we were certified by Great Place to Work® based on the results of anonymous surveys of employees; in the 2024 survey, 87% of employees stated that Power Integrations is a great place to work, compared to an average of 57% for U.S. companies according to Great Place to Work.
In 2023, 2024 and 2025 we were certified by Great Place to Work® based on the results of anonymous surveys of employees; in the 2025 survey, 78% of employees stated that Power Integrations is a great place to work, compared to an average of 57% for U.S. companies according to Great Place to Work.
Our proprietary GaN transistor technology, introduced in 2019, offers substantially higher levels of active-mode efficiency compared to traditional silicon switches, while our BridgeSwitch motor-driver ICs enable efficiency of up to 98.5%, not only minimizing waste but also eliminating the need for heatsinks in many applications, which in turn reduces cost and weight. ● Wide Power Range and Scalability Products in our current IC families can address AC-DC power supplies with output power up to approximately 500 watts as well as some high-voltage DC-DC applications; our high-voltage gate drivers are used in applications with power levels ranging from approximately 100 kilowatts to gigawatts, while our motor-driver ICs address BLDC applications up to about one horsepower.
Our proprietary GaN transistor technology offers substantially higher levels of active-mode efficiency compared to traditional silicon switches, while our BridgeSwitch ™ motor-driver ICs not only minimize power waste but also eliminate the need for heatsinks in many applications, which in turn reduces cost and weight. ● Wide Power Range and Scalability Products in our current IC families can address AC-DC power supplies with output power up to approximately 500 watts as well as some high-voltage DC-DC applications; our high-voltage gate drivers are used in applications with power levels ranging from approximately 100 kilowatts to gigawatts, while our motor-driver ICs address BLDC applications up to about one horsepower.
Approximately 97% of eligible U.S. employees participate in our 401(k) plan and 64% of eligible employees participated in the most recent offering period of our employee stock purchase plan. These benefits, combined with our culture of innovation and sustainable growth, contribute to below-average employee turnover relative to our industry and an average tenure of nearly 7 years.
Approximately 96% of eligible U.S. employees participate in our 401(k) plan and 58% of eligible employees participated in the most recent offering period of our employee stock purchase plan. These benefits, combined with our culture of innovation and sustainable growth, contribute to below-average employee turnover relative to our industry and an average tenure of nearly 7.5 years.
Prior to 2010 our addressable market consisted of AC-DC applications with up to about 50 watts of output, a served available market (“SAM”) opportunity of approximately $1.5 billion. Since then, we have expanded our SAM to approximately $4 billion through a variety of means.
Prior to 2010 our addressable market consisted of AC-DC applications with up to about 50 watts of output. Since then, we have expanded our served available market (“SAM”) to approximately $5 billion through a variety of means.
Direct sales to OEMs and merchant power supply manufacturers represented approximately 30%, 31% and 30% of our net product revenues in 2024, 2023 and 2022, respectively, while sales to distributors accounted for the remainder in each of the corresponding years.
Direct sales to OEMs and merchant power supply manufacturers represented approximately 31%, 30% and 31% of our net product revenue in 2025, 2024 and 2023, respectively, while sales to distributors accounted for the remainder in each of the corresponding years.
Since 1998, our AC-DC power-conversion ICs have featured our EcoSmart technology which drastically reduces standby power waste. We have sold more than 21 billion ICs featuring EcoSmart technology, resulting in estimated annual savings of about 15 terawatt-hours of standby power worldwide.
Since 1998, our AC-DC power-conversion ICs have featured our EcoSmart ™ technology which drastically reduces standby power waste. We have sold more than 21 billion ICs featuring EcoSmart ™ technology, resulting in estimated savings of hundreds of terawatt-hours (TWh) of standby power worldwide.
Variations of our power-supply ICs are used for high-voltage power conversion in electric vehicles (“EVs”). We also supply high-voltage LED drivers, which are AC-DC ICs specifically designed for lighting applications that utilize light-emitting diodes, and motor-driver ICs for brushless DC (“BLDC”) motors used in consumer appliances, HVAC systems, ceiling fans and a variety of industrial applications.
We also supply high-voltage LED drivers, which are AC-DC ICs specifically designed for lighting applications that utilize light-emitting diodes, and motor-driver ICs for brushless DC (“BLDC”) motors used in consumer appliances, HVAC systems, ceiling fans and a variety of industrial applications.
Therefore, the growth of our business depends largely on increasing our penetration of the markets that we serve and on further expanding our addressable market. Our growth strategy includes the following elements: ● Increase the size of our addressable market.
Therefore, the growth of our business depends largely on increasing our penetration of the markets that we serve, creating value for our customers and on further expanding our addressable market. Our growth strategy includes the following elements: ● Increase our penetration of the markets we serve.
Our wafer supply agreements with Lapis, Epson and X-FAB expire in April 2028, December 2025 and December 2028, respectively.
Our wafer supply agreements with Lapis, Epson and X-FAB expire in December 2028, December 2035 and December 2028, respectively.
Our InnoMux™ IC families provide up to three DC outputs, eliminating the need for additional power-management circuitry in certain end products requiring multiple voltages while significantly increasing efficiency. ● Increase our penetration of the markets we serve.
Our InnoMux™ IC families provide up to three DC outputs, eliminating the need for additional power-management circuitry in certain end products requiring multiple voltages while significantly increasing efficiency.
These engineers have expertise in high-voltage device structure and process technology, analog and digital IC design, system architecture and packaging. 9 Table of Contents Intellectual Property and Other Proprietary Rights We use a combination of patents, trademarks, copyrights, trade secrets and confidentiality procedures to protect our intellectual-property rights. In 2024, we received 26 U.S. and 49 foreign patents.
These engineers have expertise in high-voltage device structure and process technology, analog and digital IC design, system architecture and packaging. ​ Intellectual Property and Other Proprietary Rights We use a combination of patents, trademarks, copyrights, trade secrets and confidentiality procedures to protect our intellectual-property rights. In 2025, we received 20 U.S. and 39 foreign patents.
We have since introduced a range of other product families, expanding the range of power-supply applications we can serve and enhancing our competitiveness in applications we already addressed . In 2012 we expanded our addressable market to include high-voltage gate drivers, and in 2018 we introduced our BridgeSwitch motor-driver ICs for BLDC motors.
We have since introduced a range of other product families, expanding the range of power-supply applications we can serve and enhancing our competitiveness in applications we already addressed . We have further expanded our addressable market with the addition of high-voltage gate drivers and motor-driver ICs for BLDC motors.
As of December 31, 2024, we held 285 U.S. and 370 foreign patents. Both U.S. and foreign patents have expiration dates ranging from 2025 to 2045. While our patent portfolio as a whole is important to the success of our business, we are not materially dependent upon any single patent.
As of December 31, 2025, we held 281 U.S. and 329 foreign patents. Both U.S. and foreign patents have expiration dates ranging from 2026 to 2046. While our patent portfolio as a whole is important to the success of our business, we are not materially dependent upon any single patent.
Our top ten customers, including distributors that resell to OEMs and merchant power supply manufacturers, accounted for approximately 79%, 80% and 76% of net revenues in 2024, 2023 and 2022, respectively.
Our top ten customers, including distributors that resell to OEMs and merchant power supply manufacturers, accounted for approximately 81%, 79% and 80% of net revenue in 2025, 2024 and 2023, respectively.
In 2024, two customers, both distributors, each accounted for more than 10% of revenues, in 2023, three customers, all distributors, each accounted for more than 10% of revenues, and in 2022, two customers, both distributors, each accounted for more than 10% of revenues.
In 2025, two customers, both distributors, each accounted for more than 10% of revenue, in 2024, two customers, both distributors, each accounted for more than 10% of revenue, and in 2023, three customers, all distributors, each accounted for more than 10% of revenue .
The table below provides the approximate mix of our net sales by end market: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, End Market 2024 ​ 2023 ​ 2022 Communications ​ 12 % ​ 29 % ​ 21 % Computer 14 % ​ 12 % ​ 10 % Consumer 39 % ​ 27 % ​ 33 % Industrial 35 % ​ 32 % ​ 36 % ​ Our products are used in a vast range of power-conversion applications in the above-listed end-market categories.
The table below provides the approximate mix of our net sales by end market: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, End Market ​ ​ ​ 2025 ​ 2024 ​ 2023 Communications ​ 12 % ​ 12 % ​ 29 % Computer 13 % ​ 14 % ​ 12 % Consumer 37 % ​ 39 % ​ 27 % Industrial 38 % ​ 35 % ​ 32 % ​ 8 Table of Contents Our products are used in a vast range of power-conversion applications in the above-listed end-market categories.
In 2019 we introduced InnoMux ICs, which provide up to three DC outputs, eliminating the need for additional power-management circuitry in certain end products requiring multiple voltages while significantly increasing efficiency. In 2024 we introduced InnoMux-2 products, featuring GaN transistors rated at 1700 volts. This portfolio of power-conversion products generally addresses power supplies up to about 500 watts of output.
In 2019 we introduced InnoMux ™ ICs, which provide up to three DC outputs, eliminating the need for additional power-management circuitry in certain end products requiring multiple voltages while significantly increasing efficiency. In 2024 we introduced InnoMux-2 products, featuring GaN transistors rated at 1700 volts.
Risk Factors in this Annual Report on Form 10-K under “Risks Related to Laws and Regulations.” Human Capital As of December 31, 2024, we employed 865 full-time personnel across 15 countries with 342, or 40% of the total, residing in North America, while 60% resided offshore comprising 400 in the Asia-Pacific region and 123 across Europe.
Risk Factors in this Annual Report on Form 10-K under “Risks Related to Laws and Regulations.” ​ Human Capital As of December 31, 2025, we employed 877 full-time personnel across 15 countries with 339, or 39% of the total, residing in North America, while 61% resided offshore comprising 421 in the Asia-Pacific region and 117 across Europe.
We have recently introduced a range of products targeting the EV market; we plan to introduce additional products for EVs in the future, and expect automotive applications to become a significant portion of our SAM over time. 4 Table of Contents Also contributing to our SAM expansion has been the emergence of new applications within the power ranges that our products can address.
We have also introduced products targeting the EV market and expect automotive applications to become a significant portion of our SAM over time. Also contributing to our SAM expansion has been the emergence of new applications within the power ranges that our products can address.
Prior to joining Power Integrations, Mr. Jain held various managerial positions at Infineon Technologies Japan in the industrial module and bi-polar devices business; earlier roles included business development and technical sales in India and Japan focusing on the Asia-Pacific, Europe and South Africa markets. Sandeep Nayyar has served as our vice president and chief financial officer since June 2010.
Prior to joining Power Integrations, Mr. Jain held various managerial positions at Infineon Technologies Japan in the industrial module and bi-polar devices business; earlier roles included business development and technical sales in India and Japan focusing on the Asia-Pacific, Europe and South Africa markets. ​
These include the introduction of products that enable us to address higher-power AC-DC applications (such as our Hiper™ product families), the introduction of LED-driver products, and our entry into the gate-driver market In 2018 we introduced our BridgeSwitch™ motor-driver ICs for BLDC motors, and in 2024 we introduced BridgeSwitch-2, extending the addressable power range of our motor-driver products up to about one horsepower.
These include the introduction of products that enable us to address higher-power AC-DC applications (such as our Hiper™ product families), the introduction of LED-driver products, our entry into the gate-driver market and the introduction of our BridgeSwitch™ motor-driver ICs for BLDC motors.
Our employees are encouraged to engage with company leadership and raise concerns and questions in person, via e-mail (anonymously if desired), or at our quarterly employee communications meeting with the CEO and senior management team. All employees receive training in the prevention of sexual harassment and abusive conduct in the workplace.
Our employees are encouraged to engage with company leadership and raise concerns and questions in person, via e-mail (anonymously if desired), or at our quarterly employee communications meeting with the chief executive officer and senior management team.
This market consists of an extremely broad range of applications including consumer appliances, utility meters, LCD monitors, tablets, smartphones, computers, TVs, and numerous other consumer and industrial applications, as well as LED lighting.
This portfolio of power-conversion products generally addresses power supplies up to about 500 watts of output. This market consists of an extremely broad range of applications including consumer appliances, utility meters, LCD monitors, tablets, smartphones, computers, TVs, and numerous other consumer and industrial applications, as well as LED lighting.
Our gate-driver products compete with alternatives from such companies as Infineon, Mitsubishi Electric, Fuji Electric, Semikron and Hangzhou Firstack Technology Co., as well as driver circuits made up of discrete devices.
Competing suppliers of high-voltage GaN products include InnoScience, Infineon, Renesas, Texas Instruments, Navitas Semiconductor and others. Our gate-driver products compete with alternatives from such companies as Infineon, Mitsubishi Electric, Fuji Electric, Semikron and Hangzhou Firstack Technology Co., as well as driver circuits made up of discrete devices.
Power supplies incorporating our products are used with all manner of electronic products including appliances, industrial controls, mobile devices such as smartphones, tablets and notebook computers, electronic utility meters, battery-powered tools, and “home-automation,” or “internet of things” applications such as networked thermostats, power strips and security devices.
Power supplies incorporating our products are used with all manner of electronic products including industrial controls, “smart” utility meters, appliances, air conditioners, battery-powered tools, building-automation, or “internet-of-things” applications such as networked thermostats and security devices, and mobile devices such as smartphones, tablets and notebook computers. Variations of our power-supply ICs are used for high-voltage power conversion in electric vehicles (“EVs”).
When evaluating our net revenues, we categorize our sales into the following four major end-market groupings: communications, computer, consumer, and industrial.
End Markets and Applications Our net revenue consists primarily of sales of the products described above. When evaluating our net revenue, we categorize our sales into the following four major end-market groupings: communications, computer, consumer, and industrial.
As a result of these factors and the fact that customers’ orders can be placed with little advance notice, we have only a limited ability to react to fluctuations in demand for our products.
To provide sufficient time for assembly, testing and finishing, we typically need to receive wafers four weeks before the desired ship date to our customers. As a result of these factors and the fact that customers’ orders can be placed with little advance notice, we have only a limited ability to react to fluctuations in demand for our products.
Manufacturing We contract with three foundries for the manufacture of the vast majority of our silicon wafers: (1) Lapis Semiconductor Co., Ltd., or Lapis, (formerly OKI Electric Industry), (2) Seiko Epson Corporation, or Epson and (3) X-FAB Semiconductor Foundries AG, or X-FAB.
We attempt to protect our trade secrets and other proprietary information through non-disclosure agreements, proprietary-information agreements with employees and consultants, and other security measures. ​ 9 Table of Contents Manufacturing We contract with three foundries for the manufacture of the vast majority of our silicon wafers: (1) Lapis Semiconductor Co., Ltd., or Lapis, (formerly OKI Electric Industry), (2) Seiko Epson Corporation, or Epson and (3) X-FAB Semiconductor Foundries AG, or X-FAB.
The reports we file with the SEC are also available at www.sec.gov . Our corporate governance guidelines, the charters of our board committees, and our code of business conduct and ethics, including ethics provisions that apply to our principal executive officer, principal financial officer, controller and senior financial officers, are also available via the investor website listed above.
We will disclose any waiver we grant to an executive officer or director under our Code of Ethics, or certain amendments to the Code of Ethics, on our website https://investors.power.com/governance/. ​ Our corporate governance guidelines, the charters of our board committees, and our code of business conduct and ethics, including ethics provisions that apply to our principal executive officer, principal financial officer, controller and senior financial officers, are also available via the investor website listed above.
Also, our gate-driver products are critical components in energy-efficient DC motor drives, solar- and wind-power systems, efficient high-voltage DC transmission systems (including transmission of energy from 5 Table of Contents renewable energy installations to the power grid), and low-emissions transportation applications such as electric locomotives.
Also, our gate-driver products are critical components in energy-efficient DC motor drives, solar- and wind-power systems, efficient high-voltage DC transmission systems (including transmission of energy from renewable energy installations to the power grid), and low-emissions transportation applications such as electric locomotives. ​ 5 Table of Contents Background – Our Highly Integrated Approach to High-Voltage Power Conversion Virtually every electronic device that plugs into a wall socket requires a power supply to convert the high-voltage alternating current provided by electric utilities into the low-voltage direct current required by most electronic devices.
Warranty We generally warrant that our products will substantially conform to the published specifications for 12 months from the date of shipment. Under the terms and conditions of sale, our liability is limited generally to either a credit equal to the purchase price or replacement of the defective part.
Under the terms and conditions of sale, our liability is limited generally to either a credit equal to the purchase price or replacement of the defective part.
As a result, our products enable power converters to have superior features and functionality at a total cost equal to or lower than that of many competing alternatives.
As a result, our products enable power converters to have superior features and functionality at a total cost equal to or lower than that of many competing alternatives. Our products offer the following key benefits: ● Fewer Components, Reduced Size and Higher Reliability Our highly integrated ICs and gate drivers enable designs with far fewer components than comparable discrete designs.
This support includes hands-on design assistance as well as a range of design tools and documentation such as software and reference designs. We also believe that our record of product quality and history of delivering products to our customers on a timely basis serve as additional competitive advantages.
We also compete on the basis of product functionality such as safety features and energy-efficiency features and on the basis of the technical support we provide to our customers. This support includes hands-on design assistance as well as a range of design tools and documentation such as software and reference designs.
We typically receive shipments from our foundries approximately four to six weeks after placing orders, and lead times for new products can be substantially longer. To provide sufficient time for assembly, testing and finishing, we typically need to receive wafers four weeks before the desired ship date to our customers.
Our purchases of wafers from X-FAB are denominated in U.S. dollars. We typically receive shipments from our foundries approximately four to six weeks after placing orders, and lead times for new products can be substantially longer.
Power supplies that incorporate our ICs are also lighter and more portable than comparable power supplies built with linear transformers, which are still used in some low-power applications. ● Reduced Time-to-Market, Enhanced Manufacturability Because our products eliminate much of the complexity associated with the design of power converters, designs can typically be completed in much less time, resulting in more efficient use of our customers’ design resources and shorter time-to-market for new designs.
This reduction in component count enhances reliability and efficiency, reduces size, and results in lower manufacturing costs for our customers. ● Reduced Time-to-Market, Enhanced Manufacturability Because our products eliminate much of the complexity associated with the design of power converters, designs can typically be completed in less time, resulting in more efficient use of customers’ design resources and shorter time-to-market for new designs.
These devices, consisting primarily of copper wire wound around an iron core, tend to be bulky and heavy, and typically waste a substantial amount of electricity. In the 1970s, the availability of high-voltage discrete semiconductors enabled the development of a new generation of power supplies known as switched-mode power supplies, or switchers.
Until approximately 1970, AC-DC power supplies were generally in the form of line-frequency, or linear, transformers. These devices, consisting primarily of copper wire wound around an iron core, tend to be bulky and heavy, and typically waste a substantial amount of electricity.
Generally, our products enable customers to design power converters with total bill-of-materials costs similar to those of competing alternatives. As a result, the value of our products is influenced by the prices of discrete components, which fluctuate in relation to market demand, raw-material prices and other factors, but have generally decreased over time.
As a result, the value of our products is influenced by the prices of discrete components, which fluctuate in relation to market demand, raw-material prices and other factors, but have generally decreased over time. 10 Table of Contents While we vary the pricing of our ICs in response to fluctuations in prices of alternative solutions, we also compete based on a variety of other factors.
BridgeSwitch products are complemented by our Motor-Expert software, which provides configuration and diagnostic tools for design engineers.
BridgeSwitch ™ products are complemented by our Motor-Xpert ™ software, which provides configuration and diagnostic tools for design engineers. ​ Energy Efficiency Power supplies often draw significantly more electricity than the amount needed by the devices they power.
As of December 31, 2024, 6% of our worldwide employees were foreign nationals, defined as individuals requiring employment visas in the countries where they are employed. Women comprise approximately 24% of our total U.S. workforce and 34% of our non-technical U.S. workforce.
As of December 31, 2025, 6% of our worldwide employees were foreign nationals, defined as individuals requiring employment visas in the countries where they are employed. Innovation is the lifeblood of our company, and we depend on our people to sustain our competitive advantage.
We also continue to expand our sales and application-engineering staff and our network of distributors, as well as our offerings of technical documentation and design-support tools and services to help customers use our products. These tools and services include our PI Expert™ design software, which we offer free of charge, and our transformer-sample service.
We also continue to expand our offerings of technical documentation and design-support tools and services to help customers use our products.
Our trade secrets include a high-volume production process used in the manufacture of our high-voltage ICs. We attempt to protect our trade secrets and other proprietary information through non-disclosure agreements, proprietary-information agreements with employees and consultants, and other security measures.
Our trade secrets include a high-volume production process used in the manufacture of our high-voltage ICs.
While we vary the pricing of our ICs in response to fluctuations in prices of alternative solutions, we also compete based on a variety of other factors. Most importantly, the highly integrated nature of our products enables designs that utilize fewer total components than comparable discrete designs or designs using other integrated or hybrid products.
Most importantly, the highly integrated nature of our products enables designs that utilize fewer total components than comparable discrete designs or designs using other integrated or hybrid products. This enables power converters to be designed more quickly and manufactured more efficiently and reliably than competing designs.
We value our employees, giving them the tools and training to grow as individuals, and the freedom to take risks in the service of innovation. We offer tuition reimbursement for job-related education and provide live and online classes covering topics such as communication, leadership and management, software, and time management.
We offer tuition reimbursement for job-related education and provide live and online classes covering topics such as communication, leadership and management, software, and time management. We also offer catered lunch-time workshops on a range of personal-development topics such as financial planning, nutrition and stress management.
In 2022 we launched PowerPros ℠ , a live online video support service that enables power-supply designers to talk directly with members of our applications engineering team 24 hours a day, six days a week, anywhere in the world. ● Leverage the performance benefits of our proprietary gallium-nitride (“GaN”) technology.
These tools and services include our PI Expert™ design software, our transformer-sample service and our PowerPros ℠ , a live online video support service that enables power-supply designers to talk directly with members of our applications engineering team from anywhere in the world. 4 Table of Contents ● Increase the size of our addressable market.
Within each of our product families, designers can scale up or down in power to address a wide range of designs with minimal design effort. Energy Efficiency Power supplies often draw significantly more electricity than the amount needed by the devices they power.
Within each of our product families, designers can scale up or down in power to address a wide range of designs with minimal design effort. 6 Table of Contents Products Below is a brief description of our products: ● AC-DC power conversion products TOPSwitch ™ , our first commercially successful product family, was introduced in 1994.
Other Product Information TOPSwitch, TinySwitch, LinkSwitch, DPA-Switch, EcoSmart, Hiper, Qspeed, InnoSwitch, BridgeSwitch, SCALE, SCALE-II, SCALE-III, SCALE-iDriver, PeakSwitch, CAPZero, SENZero, ChiPhy, FluxLink, CONCEPT, PI Expert and Motor-Expert are trademarks of Power Integrations, Inc. 8 Table of Contents End Markets and Applications Our net revenues consist primarily of sales of the products described above.
Our InnoMux ™ products, also introduced in 2019, enhance active-mode efficiency in systems with multiple DC outputs by eliminating the losses incurred in separate DC-DC conversion stages. ​ Other Product Information TOPSwitch, TinySwitch, LinkSwitch, InnoSwitch, BridgeSwitch, DPA-Switch, LYTSwitch, PeakSwitch, EcoSmart, Hiper, Qspeed, InnoMux, SCALE, SCALE-iDriver, SCALE-iFlex, CAPZero, SENZero, ClampZero, LinkZero, ChiPhy, MineE-CAP, FluxLink, eSIP, eeSIP, eSOP, inSOP, MinSOP, PowerPros, PI Databook, PI Expert and Motor-Xpert are trademarks of Power Integrations, Inc.
The ethnic makeup of our U.S. workforce is approximately as follows: 63% Asian; 26% white; 6% Hispanic or Latino; 5% other. Innovation is the lifeblood of our company, and we depend on our people to sustain our competitive advantage. To attract and retain talented employees, we offer competitive compensation with generous comprehensive benefits for employees and dependents (including domestic partners).
To attract and retain talented employees, we offer competitive compensation with generous comprehensive benefits for employees and dependents (including domestic partners).
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While high-voltage GaN transistors have historically been more costly to produce than comparable silicon transistors, we have achieved cost reductions such that our GaN devices are approaching cost parity with silicon MOSFETs.
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Our proprietary PowiGaN ™ high-voltage transistor technology, introduced in 2019, increases the value of our ICs by replacing silicon transistors with higher-performance gallium-nitride (“GaN”) switches, and also enables us to address a wider range of applications. ● Leverage the performance benefits of our proprietary GaN technology.
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Industry Background Virtually every electronic device that plugs into a wall socket requires a power supply to convert the high-voltage alternating current provided by electric utilities into the low-voltage direct current required by most electronic devices.
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In the 1970s, the availability of high-voltage discrete semiconductors enabled the development of a new generation of power supplies known as switched-mode power supplies (“SMPS”). While SMPS are generally smaller, lighter-weight and more energy-efficient than linear transformers, early versions designed with discrete components were highly complex, containing numerous components and requiring a high level of analog design expertise.
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A power supply may be located inside a device, such as a consumer appliance or flat-panel TV, or it may be outside the device as in the case of a mobile-phone charger or an adapter for a cordless phone or cable modem. Until approximately 1970, AC-DC power supplies were generally in the form of line-frequency, or linear, transformers.
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Generally, our products enable customers to design power converters with total bill-of-materials costs similar to those of competing alternatives.
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These switchers generally came to be cost-effective alternatives to linear transformers in applications requiring more than a few watts of power; in recent years the use of linear transformers has declined even further as a result of energy-efficiency standards and higher raw-material prices. Switchers are generally smaller, lighter-weight and more energy-efficient than linear transformers.
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We also believe that our record of product quality and history of delivering products to our customers on a timely basis serve as additional competitive advantages. Warranty We generally warrant that our products will substantially conform to the published specifications for 12 months from the date of shipment.
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However, switchers designed with discrete components are highly complex, containing numerous components and requiring a high level of analog design expertise. Further, the complexity and high component count of discrete switchers make them relatively costly, difficult to manufacture and prone to failures.
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All employees receive training in the prevention of sexual harassment and abusive conduct in the workplace. 11 Table of Contents We value our employees, giving them the tools and training to grow as individuals, and the freedom to take risks in the service of innovation.
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Also, some discrete switchers lack protection and energy-efficiency features; adding these features may further increase the component count, cost and complexity of the power supply.
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Additional information regarding our commitment to our people can be found on our website at https://www.power.com/company/careers/people-our-engine-innovation . Corporate Information Power Integrations, Inc. was incorporated in California on March 25, 1988, and reincorporated in Delaware in December 1997. Our principal executive offices are located at 5245 Hellyer Ave, San Jose, CA 95138.
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Our products offer the following key benefits: ● Fewer Components, Reduced Size and Higher Reliability Our highly integrated ICs and gate drivers enable designs with up to 70% fewer components than comparable discrete designs. This reduction in component count enhances reliability and efficiency, reduces size, and results in lower manufacturing costs for our customers.
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Our telephone number is (408) 414-9200. ​ Available Information We may use our website, www.power.com , press releases, public conference calls, public webcasts, X and LinkedIn as means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of the factors that could affect our operating results include the following: ● the demand for our products declining in the major end markets we serve, which may occur due to competitive factors, supply-chain fluctuations, rising inflation or other changes in macroeconomic conditions; ● reliance on international sales activities for a substantial portion of our net revenues; ● the volume and timing of orders received from customers; ● our products are sold through distributors, which limits our direct interaction with our end customers, which reduces our ability to forecast sales and increases the complexity of our business; ● the ability of our products to penetrate additional markets; ● our ability to develop and bring to market new products and technologies on a timely basis; ● undetected defects and failures in meeting the exact specifications required by our products; ● warranty claims, product liability claims and product recalls; ● failure, disruption, security breaches, or other incidents impacting our information technology infrastructure or information management systems; ● interruptions in our information technology systems; ● competitive pressures on selling prices; ● risks associated with our supply chain including, the volume, cost and timing of delivery of orders placed by us with our wafer foundries and assembly subcontractors, and their ability to procure materials; ● our ability to attract and retain qualified personnel; ● the lengthy timing of our sales cycle; ● earthquakes, fire or other disasters; ● we face risks related to global health crises, which has disrupted and may again disrupt our operations, including our manufacturing, research and development, and sales and marketing activities, which could have a material adverse impact on our business, financial condition, operating results and cash flows; 14 Table of Contents ● fluctuations in exchange rates, particularly the exchange rate between the U.S. dollar and the Japanese yen, the Euro and the Swiss franc; ● the inability to adequately protect or enforce our intellectual property rights; ● expenses we are required to incur (or choose to incur) in connection with our intellectual property litigations; ● changes in tax rules and regulations, changes in interpretation of tax rules and regulations, or unfavorable assessments from tax audits may increase the amount of taxes we are required to pay; ● changes in environmental laws and regulations, including with respect to energy consumption and climate change; ● uncertainties arising out of economic consequences of current and potential military actions, including current on-going conflicts in Ukraine and the Middle East, or terrorist activities and associated political instability; ● risks associated with acquisitions and strategic investments; ● our ability to successfully integrate, or realize the expected benefits from, our acquisitions; and ● continued impact of changes in securities laws and regulations, including potential risks resulting from our evaluation of our internal controls over financial reporting.
Biggest changeSome of the factors that could affect our operating results and the price of our stock include the following: ● The demand for our products declining in the major end markets we serve and the ability of our products to penetrate additional markets; which may occur due to competitive factors, supply-chain fluctuations, rising inflation or other changes in macroeconomic or geopolitical conditions; ● changes in global trade policy, including tariffs, could reduce demand for end products that incorporate our products, which could have a material adverse effect on our revenue and operating results; ● reliance on international sales activities for a substantial portion of our net revenue; ● the volume and timing of orders received from customers; ● our ability to develop and bring to market new products and technologies, including on a timely basis; ● unfavorable or uncertain market conditions and risks relating to the adoption, use or application of emerging technologies, including AI, by our customers and in our business; 13 Table of Contents ● undetected defects, quality issues, warranty claims or product recalls related to our products; ● failure, disruption, security breaches, or other incidents impacting our information technology infrastructure or information management systems; ● interruptions in our information technology systems; ● competitive pressures on selling prices; ● risks associated with our supply chain including, the volume, cost and timing of delivery of orders placed by us with our wafer foundries and assembly subcontractors, and their ability to procure materials; ● our ability to attract and retain qualified personnel; ● our ability to realize the expected benefits of restructuring initiatives designed to reduce costs and create a more efficient organization; ● the lengthy timing of our sales cycle; ● the cyclical nature of the power supply industry and cyclical market patterns across different end markets for which our products are used; ● earthquakes, fire, global health crises, or other disasters; ● sales of our products through distributors, which limits our direct interaction with our end customers, reducing our ability to forecast sales and increasing the complexity of our business; ● fluctuations in exchange rates, particularly the exchange rate between the U.S. dollar and the Japanese yen, the Euro and the Swiss franc; ● the inability to adequately protect or enforce our intellectual property rights; ● expenses we are required to incur (or choose to incur) in connection with litigation; ● changes in tax rules and regulations, changes in interpretation of tax rules and regulations, or unfavorable assessments from tax audits may increase the amount of taxes we are required to pay and require management time and attention; ● changes in environmental laws and regulations, including with respect to energy consumption and climate change; ● current or potential war, domestic or international conflict, political or social instability, or military actions, including the conflicts in Ukraine and the Middle East; ● risks associated with acquisitions and strategic investments; ● our ability to successfully integrate, or realize the expected benefits from, our acquisitions; ● continued impact of changes in securities laws and regulations, including potential risks resulting from our evaluation of our internal controls over financial reporting; and ● we have been and may be subject to or involved in litigation, threatened litigation or other disputes, the outcome of which may be difficult to predict, and which may be costly to defend, divert management attention, require us to pay damages or other payments, or restrict the operation of our business.
If one of our third-party suppliers suffers a security breach, our response may be limited or more difficult because we may not have direct access to their systems, logs and other information related to the security breach. Interruptions in our information technology systems could adversely affect our business.
If one of our third-party suppliers suffers a security breach or incident, our response may be limited or more difficult because we may not have direct access to their systems, logs and other information related to the security breach or incident. Interruptions in our information technology systems could adversely affect our business.
Any significant system or network disruption, including but not limited to new system implementations, faulty software provided by one of our security vendors, computer viruses, security breaches, or energy blackouts could have a material adverse impact on our operations, sales and operating results.
Any significant system or network disruption, including but not limited to new system implementations, faulty software provided by one of our security vendors, computer viruses, security breaches or incidents, or energy blackouts could have a material adverse impact on our operations, sales and operating results.
Our operations are subject to income and transaction taxes in the United States and in multiple foreign jurisdictions and to review or audit by the U.S. Internal Revenue Service (“IRS”) and state, local and foreign tax authorities.
Our operations are subject to income and transaction taxes in the United States and in multiple foreign jurisdictions and to review or audit by the U.S. Internal Revenue Service and state, local and foreign tax authorities.
The failure of the foundries to supply us wafers at acceptable yields could prevent us from selling our products to our customers and would likely cause a decline in our net revenues and gross margin. In addition, our IC assembly process requires our manufacturers to use a high-voltage molding compound that has been available from only a few suppliers.
The failure of the foundries to supply us wafers at acceptable yields could prevent us from selling our products to our customers and would likely cause a decline in our net revenue and gross margin. In addition, our IC assembly process requires our manufacturers to use a high-voltage molding compound that has been available from only a few suppliers.
In addition, we may incur additional costs to remedy any damages caused by these disruptions or security breaches. Intense competition in the high-voltage power supply industry may lead to a decrease in our average selling price and reduced sales volume of our products. The high-voltage power supply industry is intensely competitive and characterized by significant price sensitivity.
In addition, we may incur additional costs to remedy any damages caused by these disruptions, security breaches or other security incidents. Intense competition in the high-voltage power supply industry may lead to a decrease in our average selling price and reduced sales volume of our products. The high-voltage power supply industry is intensely competitive and characterized by significant price sensitivity.
These uncertainties could also lead to delays or cancellations of customer orders, a general decrease in corporate spending or our inability to effectively market and sell our products. Any of these results could substantially harm our business and results of operations, causing a decrease in our revenues. We are exposed to risks associated with acquisitions and strategic investments .
These uncertainties could also lead to delays or cancellations of customer orders, a general decrease in corporate spending or our inability to effectively market and sell our products. Any of these results could substantially harm our business and results of operations, causing a decrease in our revenue. We are exposed to risks associated with acquisitions and strategic investments .
If we fail to meet the expectations of public market analysts or investors, the market price of our common stock may decrease significantly . Our net revenues and operating results have varied significantly in the past, are difficult to forecast, are subject to numerous factors both within and outside of our control, and may fluctuate significantly in the future.
If we fail to meet the expectations of public market analysts or investors, the market price of our common stock may decrease significantly . Our net revenue and operating results have varied significantly in the past, are difficult to forecast, are subject to numerous factors both within and outside of our control and may fluctuate significantly in the future.
In the past, we have experienced customer cancellations of substantial orders for reasons beyond our control, and significant cancellations could occur again at any time. Also, a relatively small number of distributors, OEMs and merchant power supply manufacturers account for a significant portion of our revenues.
In the past, we have experienced customer cancellations of substantial orders for reasons beyond our control, and significant cancellations could occur again at any time. Also, a relatively small number of distributors, OEMs and merchant power supply manufacturers account for a significant portion of our revenue.
A limited number of applications of our products, such as consumer appliances and cellphone chargers, make up a significant percentage of our net revenues. We expect that a significant level of our net revenues and operating results will continue to be dependent upon these applications in the near term.
A limited number of applications of our products, such as consumer appliances and cellphone chargers, make up a significant percentage of our net revenue. We expect that a significant level of our net revenue and operating results will continue to be dependent upon these applications in the near term.
Risks Related to Our Intellectual Property If we are unable to adequately protect or enforce our intellectual property rights, we could lose market share, incur costly litigation expenses, suffer incremental price erosion or lose valuable assets, any of which could harm our operations and negatively impact our profitability.
If we are unable to adequately protect or enforce our intellectual property rights, we could lose market share, incur costly litigation expenses, suffer incremental price erosion or lose valuable assets, any of which could harm our operations and negatively impact our profitability.
If our third-party suppliers and independent subcontractors do not produce our wafers and assemble our finished products at acceptable yields, our net revenues may decline. We depend on independent foundries to produce wafers, and independent subcontractors to assemble and test finished products, at acceptable yields and to deliver them to us in a timely manner.
If our third-party suppliers and independent subcontractors do not produce our wafers and assemble our finished products at acceptable yields, our net revenue may decline. We depend on independent foundries to produce wafers, and independent subcontractors to assemble and test finished products, at acceptable yields and to deliver them to us in a timely manner.
As the techniques used to obtain unauthorized access or to sabotage systems change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures.
As the techniques used to obtain unauthorized access to or to sabotage or otherwise disrupt systems change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures.
Like other U.S. companies, our business and operating results are subject to uncertainties arising out of economic consequences of current and potential military actions or terrorist activities and associated political instability, and the impact of heightened security concerns on domestic and international travel and commerce.
Like other U.S. companies, our business and operating results are subject to uncertainties arising out of economic consequences of current and potential military actions or terrorist activities and associated political instability, and the impact of heightened security concerns on domestic and international travel and 22 Table of Contents commerce.
We have implemented measures to manage our risks related to such disruptions, but such disruptions could still occur and negatively impact our operations and financial results. 17 Table of Contents Furthermore, the risk of state-supported and geopolitically motivated cybersecurity incidents may increase due to geopolitical instability.
We have implemented measures to manage our risks related to such disruptions, but such disruptions could still occur and negatively impact our operations and financial results. Furthermore, the risk of state-supported and geopolitically motivated cybersecurity incidents may increase due to geopolitical instability.
Our success depends in significant part upon our ability to develop new ICs for high-voltage power conversion for existing and new markets, to introduce these products in a timely manner and to have these products selected for design into products of leading manufacturers.
Our success depends in significant part upon our ability to develop new ICs for high-voltage power conversion for existing and new markets, to introduce these products in a timely manner and to have these products selected for design into products.
If we do not prevail in our litigation, we will have expended significant financial resources, potentially without any benefit, and may also suffer the loss of rights to use some technologies. We are currently involved in a number of patent litigation matters and the outcome of the litigation is uncertain.
If we do not prevail in our litigation, we will have expended significant financial resources, potentially without any benefit, and may also suffer the loss of rights to use some technologies. We are currently involved in defending a patent litigation matter and the outcome of the litigation is uncertain.
We have also incurred, and expect to continue to incur, significant legal costs in conducting these lawsuits, including the appeal of the case we won, and our involvement in this litigation and any future intellectual property litigation could adversely affect sales and divert the efforts and attention of our technical and management personnel, whether or not such litigation is resolved in our favor.
We have also incurred, and expect to continue to incur, significant legal costs in conducting these lawsuits, including the appeals of the case we are defending, and our involvement in this litigation and any future intellectual property litigation could adversely affect sales and divert the efforts and attention of our technical and management personnel, whether or not such litigation is resolved in our favor.
We cannot guarantee that third parties and infrastructure in our supply chain or our partners’ supply chains have not been or will not be compromised or that they do not or will not in the future contain exploitable defects or bugs that could result in a breach of or disruption to our IT infrastructure, including our products and services, or the third-party information technology systems that support our services.
We cannot guarantee that third parties and infrastructure in our supply chain or our partners’ supply 17 Table of Contents chains have not been or will not be compromised or that they do not or will not in the future contain exploitable defects or bugs that could result in a breach of or disruption to or other incident impacting our IT infrastructure, including our products and services, or the third-party information technology systems that support our services.
In the event of an adverse outcome, we may be required to pay substantial damages, stop our manufacture, use, sale, or importation of infringing products, or obtain licenses to the intellectual property we are found to have infringed.
In the event of an 21 Table of Contents adverse outcome, we may be required to pay substantial damages, stop our manufacture, use, sale, or importation of infringing products, or obtain licenses to the intellectual property found to have been infringed.
The European Union (“EU”) member states formally adopted the EU’s Pillar Two Directive, which was established by the Organization for Economic Cooperation and Development, and which generally provides for a 15 per cent minimum effective tax rate for multinational corporations, in all jurisdictions in which they operate.
The EU member states formally adopted the EU’s Pillar Two Directive, which was established by the Organization for Economic Cooperation and Development (the “OECD”), and which generally provides for a 15 per cent minimum effective tax rate for multinational corporations, in all jurisdictions in which they operate (“Pillar Two”).
Any further economic slowdown in the end markets that we serve could cause a further slowdown in demand for our ICs, causing our net revenues to decline further and potentially result in write-offs of excess or obsolete inventory, which could cause the price of our stock to fall.
Any economic slowdown or 14 Table of Contents disruption in the end markets that we serve could cause a slowdown in demand for our ICs, causing our net revenue to decline and potentially result in write-offs of excess or obsolete inventory, which could cause the price of our stock to fall.
Risks Related to Financial Performance Fluctuations in exchange rates, particularly the exchange rate between the U.S. dollar and the Japanese yen, Swiss franc and euro, may impact our gross margin and net income .
Fluctuations in exchange rates, particularly the exchange rate between the U.S. dollar and the Japanese yen, Swiss franc and euro, may impact our gross margin and net income .
Selling through distributors reduces our ability to forecast sales and increases the complexity of our business, requiring us to: ● manage a more complex supply chain; ● monitor the level of inventory of our products at each distributor, and ● monitor the financial condition and credit-worthiness of our distributors, many of which are located outside of the United States and are not publicly traded.
Selling through distributors reduces our ability to forecast sales and creates challenges for our business by requiring us, among other things, to: ● manage a more complex supply chain; ● monitor the level of inventory of our products at each distributor, and ● monitor the financial condition and credit-worthiness of our distributors, many of which are located outside of the United States and are not publicly traded.
Federal and state laws; and ● foreign-currency exchange risk. 15 Table of Contents Our failure to adequately address these risks could reduce our international sales and materially and adversely affect our operating results.
Federal and state laws; and ● foreign-currency exchange fluctuations. Our failure to adequately address these risks could reduce our international sales and materially and adversely affect our operating results.
Furthermore, we cannot assure that we will be able to introduce new products in a timely and cost-effective manner or in sufficient quantities to meet customer demand or that these products will achieve market acceptance. Our failure, or our customers’ failure, to develop and introduce new products successfully and in a timely manner would harm our business.
Furthermore, we cannot assure that we will be able to introduce new products in a timely and cost-effective manner or in sufficient quantities to meet customer demand or that these products will achieve market acceptance.
A breakdown in existing controls and procedures around our cyber-security environment may prevent us from detecting, reporting or responding to cyber incidents in a timely manner and could have a material adverse effect including but not limited to i nterruptions or delays in our business operations, loss of existing or future customers, and damage to our reputation, which could adversely affect our business, reputation, and financial results .
A breakdown in existing controls and procedures around our cyber-security environment may prevent us from detecting, reporting or responding to cyber incidents in a timely manner and any such breakdown, or any security breach or incident suffered by us of our third-party service providers, could have a material adverse effect including but not limited to i nterruptions, other disruptions or delays in our business operations, loss of existing or future customers, claims, demands and liabilities and damage to our reputation, which could adversely affect our business, reputation, and financial results .
International sales involve a number of risks to us, including: ● tariffs, protectionist measures and other trade barriers and restrictions; ● potential insolvency of international distributors and representatives; ● reduced protection for intellectual property rights in some countries; ● the impact of recessionary environments and inflation in the United States and other economies where we do business; ● global, regional, and local economic and political conditions, including, but not limited to, social, economic, political, and supply chain instability related to the uncertainty regarding relationships among the international community as a whole including potential risks stemming from tensions between China and Taiwan and between China and Western countries, as well as related to armed conflicts that exist, or in the future could exist, in various parts of the world; ● the burdens of complying with a variety of foreign and applicable U.S.
International sales involve a number of risks to us, including: ● tariffs, protectionist measures and other trade barriers and restrictions; ● potential insolvency of international distributors and representatives; ● reduced protection for intellectual property rights in some countries; ● the impact of recessionary environments and inflation in the U.S. and other economies where we do business; ● global, regional, and local conditions, including, but not limited to, social, economic, political, and supply chain instability related to the uncertainty regarding relationships among countries, including tensions between China and Taiwan and between China and other countries, as well as the conflict between Russia and Ukraine and the ongoing conflict in the Middle East; ● the burdens of complying with a variety of foreign and applicable U.S.
Risks Related to the Operation and Growth of Our Business If demand for our products continues to decline in our major end markets, our net revenues will decline further. When our customers are not successful in maintaining high levels of demand for their products, their demand for our ICs decreases, which adversely affects our operating results.
Risks Related to the Operation and Growth of Our Business If demand for our products declines in our major end markets and we do not penetrate additional markets, our net revenue will decrease. When our customers are not successful in maintaining high levels of demand for their products, their demand for our products decreases, which adversely affects our operating results.
In addition, the United States, countries in Asia and other countries where we do business have recently enacted or are considering changes in relevant tax, accounting and other laws, regulations and interpretations, including changes to tax laws applicable to multinational companies. These potential changes could adversely affect our effective tax rates or result in other costs to us.
In addition, the United States, countries in Asia and other countries where we do business have recently enacted or are considering changes in relevant tax, accounting and other laws, regulations and interpretations, including changes to tax laws applicable to multinational companies.
Our primary supply arrangements for the production of wafers are with Epson, Lapis and X-FAB. Our contracts with these suppliers expire on varying dates, with the earliest to expire in December 2025. Although some aspects of our relationships with Lapis, X-FAB and Epson are contractual, many important aspects of these relationships depend on their continued cooperation.
Our contracts with these suppliers expire on varying dates, with Lapis and X-FAB each to expire in December 2028 and Epson to expire in December 2035. Although some aspects of our relationships with Lapis, X-FAB and Epson are contractual, many important aspects of these relationships depend on their continued cooperation.
Our business as well as the business of our suppliers, customers and distributors was impacted by the COVID-19 pandemic and may in the future be adversely impacted by the world-wide response to any further global health crises. Such impacts include public health measures, travel restrictions, business shutdowns, border closures, delivery and freight delays and other disruptions.
Additionally, our business or the business of our suppliers may in the future be adversely impacted by world-wide responses to any global health or other crises. Such impacts could include public health measures, travel restrictions, business shutdowns, border closures, delivery and freight delays and other disruptions.
If defects and failures occur in our products, we could experience lost revenue, increased costs, including product warranty or liability claims and costs associated with customer support and product recalls, delays in or cancellations or rescheduling of orders or shipments and product returns or discounts.
If defects and failures occur in our products or if or any such failures are alleged to result in bodily injury, death, and/or property damage, we could experience lost revenue, decreased ability to compete, increased costs (including product warranty or liability claims) and costs associated with customer support and product recalls, delays in or cancellations or rescheduling of orders or shipments and product returns or discounts.
Complying with the requirements of the federal securities laws and Nasdaq’s conditions for continued listing have imposed significant legal and financial compliance costs, and are expected to continue to impose significant costs and management burden on us.
Complying with the requirements of the federal securities laws, state laws, stock exchange requirements, and other legal requirements has imposed significant legal and financial compliance costs, and are expected to continue to impose significant costs and management burden on us.
In addition, if one or more of these individuals leaves our employ, and we are 18 Table of Contents unable to quickly and efficiently replace those individuals with qualified personnel who can smoothly transition into their new roles, our business may suffer.
The loss of the services of one or more of our engineers, executive officers or other key personnel could harm our business. In addition, if qualified personnel leave our employ, and we are unable to quickly and efficiently replace those individuals with qualified personnel who can smoothly transition into their new roles, our business may suffer.
If a customer decides at the design stage not to incorporate our products into its product, we may not have another opportunity for a design win with respect to that product for many months or years.
If a customer decides at the design stage not to incorporate our products into its product, we may not have another opportunity for a design win with respect to that product for many months or years. The power supply industry routinely experiences cyclical market patterns and our products are used across different end markets.
See Note 14, Legal Proceedings and Contingencies , in our Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. For example, we are being sued in an ongoing case for patent infringement.
See Note 14, Legal Proceedings and Contingencies , in our Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
To the extent that a competitor penetrates additional markets before we do, or takes market share from us in our existing markets, our net revenues and financial condition could be materially adversely affected. If our efforts to enhance existing products and introduce new products are not successful, we may not be able to generate demand for our products .
To the extent that a competitor penetrates additional markets before we do, or takes market share from us in our existing markets, our net revenue and financial condition could be materially adversely affected.
However, customer decisions to use our products, commonly referred to as design wins, can often require us to expend significant research and development and sales and marketing resources without any assurance of success. These significant research and development and sales and marketing resources often precede volume sales, if any, by a year or more.
Our products are generally incorporated into a customer’s products at the design stage. However, customer decisions to use our products, commonly referred to as design wins, can often require us to expend significant research and development and sales and marketing resources without any assurance of success.
However, a successful warranty or product liability claim against us in excess of our available insurance coverage, or a requirement that we participate in a product recall, could have adverse effects on our business results.
These policies may not cover all claims or be of a sufficient amount to fully protect against such claims, and a successful warranty or product liability claim against us in excess of our available insurance coverage, or a requirement that we participate in a product recall, could have adverse effects on our business results.
Demand for end products incorporating our products has been highly cyclical over time and has been impacted by economic downturns; our recent results have been impacted by economic conditions including inflation and the effects of anti-COVID measures in China.
Demand for end products incorporating our products has been highly cyclical over time and has been impacted by economic downturns; our recent results have been impacted by economic conditions, including softness in housing markets, which affects demand for consumer appliances and inflation.
This could adversely impact our revenues and profits. Any failure to manage these complexities could disrupt or reduce sales of our products and unfavorably impact our financial results. If our products do not penetrate additional markets, our business will not grow as we expect.
This could adversely impact our revenue and profits. Any failure to manage these complexities could disrupt or reduce sales of our products and unfavorably impact our financial results.
Our international sales activities account for a substantial portion of our net revenues, which subjects us to substantial risks.
Our international sales activities account for a substantial portion of our net revenue, which subjects us to substantial risks. Sales to customers outside of the U.S. account for, and have accounted for, a large portion of our net revenue.
The value of any design win will largely depend upon the commercial success of the customer’s product. We cannot assure that we will continue to achieve design wins or that any design win will result in future revenues.
These significant research and development and sales and marketing resources often precede volume sales, if any, by a year or more. The value of any design win will largely depend upon the commercial success of the customer’s product. We cannot assure that we will continue to achieve design wins or that any design win will result in future revenue.
We cannot assure that the steps we have 19 Table of Contents taken to protect our intellectual property will be adequate to prevent misappropriation, or that others will not develop competitive technologies or products.
Our success depends upon our ability to continue our technological innovation and protect our intellectual property, including patents, trade secrets, copyrights and know-how. We cannot assure that the steps we have taken to protect our intellectual property will be adequate to prevent misappropriation, or that others will not develop competitive technologies or products.
The failure to obtain necessary licenses and other rights, and/or litigation arising out of infringement claims could cause us to lose market share and harm our business. As our patents expire, we will lose intellectual property protection previously afforded by those patents.
The failure to obtain necessary licenses and other rights, and/or litigation arising out of infringement claims could cause us to lose market share and harm our business. Our U.S. patents have expiration dates ranging from 2026 to 2046.
Further, the rules and regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which became effective in 2011, may impose significant costs and management burden on us. Additionally, because these laws, regulations and standards are expected to be subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.
Additionally, because these laws, regulations and standards are expected to be subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.
Any interruption in our ability, or that of our major suppliers, to continue operations could delay the development and shipment of our products and have a substantial negative impact on our financial results.
Any interruption in our ability, or that of our major suppliers, to continue operations could delay the development and shipment of our products and have a substantial negative impact on our financial results. 20 Table of Contents Risks Related to Financial Performance Our products are sold through distributors, which limits our direct interaction with our end customers, therefore reducing our ability to forecast sales and increasing the complexity of our business.
New product introduction schedules are subject to the risks and uncertainties that typically accompany development and delivery of complex technologies to the market place, including product development delays and defects. If we fail to develop and sell new products in a timely manner, then our net revenues could decline.
New product introduction schedules 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. We have experienced delays from time to time in completing new product development.
In addition, we cannot be sure that we will be able to adjust to changing market demands as quickly and cost-effectively as necessary to compete successfully.
If we fail to develop and sell new products in a timely manner in the future, then our net revenue and ability to compete domestically or internationally could decline. In addition, we cannot be sure that we will be able to adjust to changing market demands as quickly and cost-effectively as necessary to compete successfully.
Some OEMs expect suppliers to warrant their products for longer periods of time and are increasingly looking to them for contribution when faced with product liability claims or recalls. We carry various commercial liability policies, including umbrella/excess policies which provide some protection against product liability exposure.
Some OEMs expect suppliers to warrant their products for longer periods of time and are increasingly looking to them for contribution when faced with product liability claims or recalls. While we specifically exclude consequential damages in our standard terms and conditions, certain of our contracts may not exclude such liabilities.
We believe our failure to compete successfully in the high-voltage power supply business, including our ability to introduce new products with higher average selling prices, would materially harm our operating results. We depend on third-party suppliers to provide us with wafers for our products and if they fail to provide us sufficient quantities of wafers, our business may suffer .
We believe our failure to compete successfully in the high-voltage power supply business, including our ability to introduce new products with higher average selling prices, would materially harm our operating results. As our patents expire, we will lose intellectual property protection previously afforded by those patents.
Although we provide our foundries with rolling forecasts of our production requirements, their ability to provide wafers to us is ultimately limited by the available capacity of the wafer foundry.
We estimate that it would take 12 to 24 months from the time we identified an alternate manufacturing source to produce wafers with acceptable manufacturing yields in sufficient quantities to meet our needs. 18 Table of Contents Although we provide our foundries with rolling forecasts of our production requirements, their ability to provide wafers to us is ultimately limited by the available capacity of the wafer foundry.
When a potential liability exists we will maintain reserves for customer returns, however we cannot assure that these reserves will be adequate. 16 Table of Contents Our products must meet exacting specifications, and undetected defects and failures may occur which may cause customers to return or stop buying our products and/or impose significant costs to us.
Our products must meet exacting specifications, and undetected defects, failures or other quality issues may occur which may cause customers to return or stop buying our products and/or impose significant costs to us. Our customers generally establish demanding specifications for quality, performance and reliability, and our products must meet these specifications.
Additional risks and uncertainties not presently known to us or that we deem immaterial also may impair our business operations. If any of the following risks or such other risks actually occurs, our business could be harmed. Risks Related to Ownership of Our Common Stock Our operating results are volatile and difficult to predict.
Our business, financial condition, results of operations, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, financial condition, results of operations, and prospects could be adversely affected.
Our customers generally establish demanding specifications for quality, performance and reliability, and our products must meet these specifications. ICs as complex as those we sell often encounter development delays and may contain undetected defects or failures when first introduced or after commencement of commercial shipments.
ICs encounter development delays and may contain undetected defects, failures or other quality issues when first introduced or after commencement of commercial shipments. We have from time to time in the past experienced product quality, performance or reliability problems.
We do not have long-term employment contracts with, and we do not have in place key person life insurance policies on, any of our employees. Because the sales cycle for our products can be lengthy, we may incur substantial expenses before we generate significant revenues, if any. Our products are generally incorporated into a customer’s products at the design stage.
We do not have long-term employment contracts with, and we do not have in place key person life insurance policies on, any of our employees.
Any serious disruption in the supply of wafers from Epson, Lapis and X-FAB could harm our business. We estimate that it would take 12 to 24 months from the time we identified an alternate manufacturing source to produce wafers with acceptable manufacturing yields in sufficient quantities to meet our needs.
Any serious disruption in the supply of wafers from Epson, Lapis and X-FAB could harm our business.
This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. ​
This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. ​ We have been and may be subject to or involved in litigation, threatened litigation or other disputes, the outcome of which may be difficult to predict, and which may be costly to defend, divert management attention, require us to pay damages or other payments, or restrict the operation of our business.
New environmental laws and regulations could require us or our suppliers to obtain alternative materials that may increase our costs more or be less available, which may adversely affect our operating results. 20 Table of Contents General Risk Factors Uncertainties arising out of economic consequences of current and potential military actions or terrorist activities and associated political instability could adversely affect our business.
New environmental laws and regulations could require us or our suppliers to obtain alternative materials that may increase our costs more or be less available, which may adversely affect our operating results. Additionally, the heightened worldwide awareness regarding climate change could also result in risks such as shifting customer preferences.
If our international sales declined and we were unable to increase domestic sales, our revenues would decline and our operating results would be harmed.
Approximately 98% of our net revenue for each of the years ended December 31, 2025, 2024 and 2023 was generated by sales to customers outside of the U.S. If our international sales decline and we are unable to increase domestic sales, our revenue and operating results would be harmed.
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Item 1A. Risk Factors. The following are important factors that could cause actual results or events to differ materially from those contained in any forward-looking statements made by us or on our behalf. The risks and uncertainties described below are not the only ones we face.
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Item 1A. Risk Factors. Investing in our common stock involves a high degree of risk.
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Sales to customers outside of the United States of America account for, and have accounted for a large portion of our net revenues, including approximately 98%, 98% and 96% of our net revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
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You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our common stock.
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Specifically, our top ten customers, including distributors, accounted for 79%, 80% and 76% of our net revenues in each of the years ended December 31, 2024, 2023 and 2022, respectively. However, a significant portion of these revenues are attributable to sales of our products through distributors of electronic components.
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In that event, the market price of our common stock could decline, and you could lose all or part of your investment. Risks Related to Ownership of Our Common Stock Our operating results are volatile and difficult to predict.
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These distributors sell our products to a broad, diverse range of end users, including OEMs and merchant power supply manufacturers, which mitigates the risk of customer concentration to a large degree. Our products are sold through distributors, which limits our direct interaction with our end customers, therefore reducing our ability to forecast sales and increasing the complexity of our business.
Added
Changes in global trade, in particular the escalation and imposition of new and higher tariffs and additional export controls, could reduce demand for end products that incorporate our products, which could have a material adverse effect on our revenue and operating results.
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Sales to distributors accounted for approximately 70%, 69% and 70% of net revenues in the years ended December 31, 2024, 2023 and 2022, respectively.
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Further, increased tariffs or the imposition of other barriers to international trade could place pressure on our prices as our customers seek to offset the impact of increased tariffs on them. Compliance with import and export controls could impair our ability to compete in international markets or subject us to liability if we violate these controls.
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In addition, customers may defer or return orders for existing products in response to the introduction of new products.
Added
Although power supplies using our products are designed and distributed worldwide, most of these power supplies are manufactured by our customers in Asia.
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We have from time to time in the past experienced product quality, performance or reliability problems.
Added
As a result, our business is subject to risks related to tariffs and other trade protection measures put in place by the United States or other countries, as well as evolving international trade relations, including but not limited to those between the U.S., China, countries in the APAC region and the EU.
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While we specifically exclude consequential damages in our standard terms and conditions, certain of our contracts may not exclude such liabilities. Our liability insurance which covers certain damages arising out of product defects may not cover all claims or be of a sufficient amount to fully protect against such claims.
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During the year 2025, the United States government imposed and threatened significant additional tariffs on goods imported into the U.S. from most of its trading partners, and, in response, multiple countries imposed or threatened retaliatory tariffs and other actions.
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Costs or payments in connection with such claims could harm our operating results. Warranty claims, product liability claims and product recalls could harm our business, results of operations and financial condition.
Added
Trade tensions between the U.S. and China have escalated and may continue to escalate, including the U.S. increasing tariffs on goods originating in China and China increasing tariffs on goods originating in the U.S.
Removed
We face an inherent business risk of exposure to warranty and product liability claims if products fail to perform as expected or any such failure is alleged to result in bodily injury, death, and/or property damage. In addition, if any of our designed products are alleged to be defective, we may be required to participate in their recalls.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAn overall review of risk is inherent in our board of directors ongoing consideration of our long-term strategies, transactions and other matters presented to and discussed by the board of directors. This includes a discussion of the likelihood and potential magnitude of various risks, including cybersecurity risks, and any actions management has taken to limit, monitor or control those risks.
Biggest changeThis includes a discussion of the likelihood and potential magnitude of various risks, including cybersecurity risks, and any actions management has taken to limit, monitor or control those risks. In October 2025, the board established a Cybersecurity Committee and adopted a Charter of the Cybersecurity Committee.
As part of our policy, we monitor termination of agreements with vendors designed to ensure that access to Company information is appropriately terminated in a timely manner. Unauthorized network intrusions or other significant information security incidents against third-party systems used by the Company internally are handled in the same manner as internal systems. However as described in Part 1.
As part of our policy, we monitor termination of agreements with vendors designed to ensure that access to Company information is appropriately terminated in a timely manner. Unauthorized network intrusions or other significant information security incidents against third-party systems used by the Company internally are handled in the same manner as internal systems. However as described in Part I.
For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A.
For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part I. Item 1A.
Risk Factors in this Annual Report on Form 10-K under “Risks Related to the Operation and Growth of Our Business.” 22 Table of Contents Management Oversight Our IT infrastructure and the assessment and management of associated risks are primarily the responsibility of our Chief Information Security Officer (“CISO”).
Risk Factors in this Annual Report on Form 10-K under “Risks Related to the Operation and Growth of Our Business.” Management Oversight Our IT infrastructure and the assessment and management of associated risks are primarily the responsibility of our Chief Information Security Officer (“CISO”).
The report provides a comprehensive cybersecurity update for the past quarter, usually including topics such as details on threat landscape, incident response, security metrics and performance, compliance and regulatory updates, cybersecurity investments and budget, employee security awareness and trainings, vendor risk management updates, business continuity and disaster recovery updates, and an update on cybersecurity strategy, projects and roadmap. ​
The report provides a comprehensive cybersecurity update for the past quarter, usually including topics such as details on threat landscape, incident response, security metrics and performance, compliance and regulatory updates, cybersecurity investments and budget, employee security awareness and trainings, vendor risk management updates, business continuity and disaster recovery updates, and an update on cybersecurity strategy, projects and roadmap. ​ 25 Table of Contents
Although we believe we have adequate resources and sufficient policies, procedures, and oversight in place to identify and manage IT security risks related to our business operations, there can be no guarantee that our policies and procedures will be properly followed in every instance or that those policies and procedures will be effective.
Although we believe we have adequate resources and sufficient policies, procedures, and oversight in place to identify and manage IT security risks related to our business operations, there can be no guarantee that our policies and 24 Table of Contents procedures will be properly followed in every instance or that those policies and procedures will be effective.
These providers may also experience breaches and attacks on their products which may impact our systems. Further we may also face additional cybersecurity risk due to error or intentional misconduct by contractors and other third-party service providers related to the use of these systems as part of our IT infrastructure.
Further we may also face additional cybersecurity risk due to error or intentional misconduct by contractors and other third-party service providers related to the use of these systems as part of our IT infrastructure.
These policies and controls procedures discussed in more detail below, are an integrated component of our enterprise risk management assessment processes. We routinely review and assess our business groups and systems to identify and prioritize areas of risk, including cybersecurity risk. The results of these assessments and progress against prioritized goals are presented to the board of directors each quarter.
These policies and controls procedures discussed in more detail below, are an integrated component of our enterprise risk management assessment processes. We routinely review and assess our business groups and systems to identify and prioritize areas of risk, including cybersecurity risk.
We have established disclosure controls and procedures to address cybersecurity events, which include elements relating to comprehensive analysis of events and communication within the company, as well as addressing potential disclosure obligations arising from security breaches. We have partnered with third parties to support our information security systems and processes, and to help design, build, test, implement and maintain them.
We deploy technical safeguards that are designed to protect our systems from cybersecurity threats, including firewalls, intrusion prevention, and intrusion detection systems. We have established disclosure controls and procedures to address cybersecurity events, which include elements relating to comprehensive analysis of events and communication within the company, as well as addressing potential disclosure obligations arising from security breaches.
We have incurred and may in the future incur significant costs in order to implement, maintain, and/or update security systems we believe are necessary to protect our IT infrastructure. We deploy technical safeguards that are designed to protect our systems from cybersecurity threats, including firewalls, intrusion prevention, and intrusion detection systems.
The results of these assessments and progress against prioritized goals are presented to a committee of our board of directors each quarter. We have incurred and may in the future incur significant costs in order to implement, maintain, and/or update security systems we believe are necessary to protect our IT infrastructure.
Annual risk assessments are conducted by third party consultants to help ensure that risks to our IT infrastructure are minimized or eliminated. We rely on products and services provided by third parties for portions of our IT infrastructure, including business management, operations and finance systems.
We have partnered with third parties to support our information security systems and processes, and to help design, build, test, implement and maintain them. Annual risk assessments are conducted by third party consultants to help ensure that risks to our IT infrastructure are minimized or eliminated.
Our management reports to our board of directors on information security matters on a quarterly basis, or more frequently as needed. One of the key functions of our board of directors is informed oversight of our various processes for managing risk.
Our management reports to the Cybersecurity Committee on information security matters on a quarterly basis, or more frequently as needed. The Cybersecurity Committee reports updates to the board of directors as applicable. ​ At each quarterly Cybersecurity Committee meeting, the committee members receive the quarterly cybersecurity board update that is prepared by our CISO.
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At each quarterly board meeting, the full board receives the quarterly cybersecurity board update that is prepared by our CISO.
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We rely on products and services provided by third parties for portions of our IT infrastructure, including business management, operations and finance systems. These providers may also experience breaches and attacks on their products which may impact our systems.
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One of the key functions of our board of directors is informed oversight of our various processes for managing risk. An overall review of risk is inherent in our board of directors’ ongoing consideration of our long-term strategies, transactions and other matters presented to and discussed by the board of directors.
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Pursuant to that charter the primary purpose of the Committee is to assist the Board in fulfilling its oversight responsibilities with respect to the Company’s information technology use and data security, including, but not limited to, enterprise cybersecurity, privacy, data collection and protection and compliance with information security and data protection laws.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease administrative office space in Singapore, R&D facilities in Canada, the United Kingdom, the Philippines, New York, and Malaysia, and sales offices in various countries around the world to accommodate our sales force. We believe that our current facilities are sufficient for our near-term needs; however, if headcount increases above capacity we may need to lease additional space. ​
Biggest changeWe lease administrative office space in Singapore, the United Kingdom, the Philippines, New York, and Malaysia, and sales offices in various countries around the world to accommodate our sales force. We believe that our current facilities are sufficient for our near-term needs; however, if headcount increases above capacity we may need to lease additional space. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. Information with respect to this item may be found in Note 14, Legal Proceedings and Contingencies, in our Notes to Consolidated Financial Statements included later in this Annual Report on Form 10-K, which information is incorporated here by reference. 23 Table of Contents ​ Item 4. Mine Safety Disclosures.
Biggest changeItem 3. Legal Proceedings. Information with respect to this item may be found in Note 14, Legal Proceedings and Contingencies, in our Notes to Consolidated Financial Statements included later in this Annual Report on Form 10-K, which information is incorporated here by reference. ​ Item 4. Mine Safety Disclosures. Not applicable. 26 Table of Contents PART II
Removed
Not applicable. 24 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

64 edited+17 added−9 removed33 unchanged
Biggest changeOur uses of cash beyond the next 12 months will depend on many factors, including the general economic environment in which we operate and our ability to generate cash flow from operations, which are uncertain but include funding our operations and additional capital expenditures. 33 Table of Contents Contractual Obligations As of December 31, 2024, we had the following non-cancelable contractual obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period ​ ​ ​ ​ ​ Less than 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) Total Year 1 - 3 Years 4 - 5 Years Over 5 Years Operating lease obligations (1) ​ $ 19,003 ​ $ 3,849 ​ $ 7,054 ​ $ 4,035 ​ $ 4,065 Purchase obligations (2) ​ $ 37,877 ​ $ 37,877 ​ $ — ​ $ — ​ $ — (1) Operating lease obligations represent undiscounted non-cancelable remaining lease payments.
Biggest changeOur uses of cash beyond the next 12 months will depend on many factors, including the general economic environment in which we operate and our ability to generate cash flow from operations, which are uncertain but include funding our operations and additional capital expenditures.
Other income . Other income consists primarily of interest income earned on cash and cash equivalents, marketable securities and other investments, and the impact of foreign exchange gains or losses.
Other income consists primarily of interest income earned on cash and cash equivalents, marketable securities and other investments, and the impact of foreign exchange gains or losses.
Provision (benefit) for income taxes. Provision for income taxes represents federal, state and foreign taxes.
Provision (Benefit) for income taxes. Benefit for income taxes represents federal, state and foreign taxes.
Cash from Investing Activities Our investing activities in the year ended December 31, 2024 resulted in a $25.9 million net use of cash, consisting primarily of $17.3 million for purchases of property and equipment and $9.5 million for the Odyssey acquisition, partially offset by $0.9 million of proceeds from sales and maturities of marketable securities, net of purchases.
Our investing activities in the year ended December 31, 2024, resulted in a $25.9 million net use of cash, consisting primarily of $17.3 million for purchases of property and equipment and $9.5 million for the Odyssey acquisition, partially offset by $0.9 million of proceeds from sales and maturities of marketable securities, net of purchases.
After we verify that the claim was pre-approved, we issue a credit memo to the distributor for the ship-and-debit claim. In determining the transaction price, we consider ship-and-debit price adjustments to be variable consideration. At the time revenue is recognized on sales to distributors, future ship-and-debit price adjustments are unknown and therefore subject to uncertainty.
After we verify that the claim is pre-approved, we issue a credit memo to the distributor for the ship-and-debit claim. In determining the transaction price, we consider ship-and-debit price adjustments to be variable consideration. At the time revenue is recognized on sales to distributors, future ship-and-debit price adjustments are unknown and therefore subject to uncertainty.
When evaluating the adequacy of our provision for excess and obsolete inventory, we identify excess and obsolete products and also analyze historical usage, forecasted demand, current economic trends and historical write-offs . This write-down is reflected as a reduction to inventory in the consolidated balance sheets and an increase in cost of revenues in our consolidated statements of income.
When evaluating the adequacy of our provision for excess and obsolete inventory, we identify excess and obsolete products and also analyze historical usage, forecasted demand, current economic trends and historical write-offs . This write-down is reflected as a reduction to inventory in the consolidated balance sheets and an increase in cost of revenue in our consolidated statements of income.
Off-Balance-Sheet Arrangements As of December 31, 2024 and 2023, we did not have any off-balance-sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which are typically established for the purpose of facilitating off-balance-sheet arrangements or other contractually narrow or limited purposes.
Off-Balance-Sheet Arrangements As of December 31, 2025 and 2024, we did not have any off-balance-sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which are typically established for the purpose of facilitating off-balance-sheet arrangements or other contractually narrow or limited purposes.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Our cost of revenues consists primarily of the purchase of wafers from our contracted foundries, the assembly, packaging and testing of our products by sub-contractors, product testing performed in our own facility, overhead associated with the management of our supply chain and the amortization of acquired intangible assets. Gross margin is gross profit divided by net revenues.
Our cost of revenue consists primarily of the purchase of wafers from our contracted foundries, the assembly, packaging and testing of our products by sub-contractors, product testing performed in our own facility, overhead associated with the management of our supply chain and the amortization of acquired intangible assets. Gross margin is gross profit divided by net revenue.
Cash from Financing Activities Our financing activities in the year ended December 31, 2024, resulted in a $68.2 million net use of cash.
Our financing activities in the year ended December 31, 2024, resulted in a $68.2 million net use of cash.
GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those listed below.
GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those listed below.
We apply the provisions of Accounting Standards Codification (ASC) 606-10, Revenue from Contracts with Customers , and all related appropriate guidance. We recognize revenue under the core principle to depict the transfer of control to our customers in an amount reflecting the consideration we expect to be entitled.
We apply the provisions of Accounting Standards Codification (“ASC”) 606-10, Revenue from Contracts with Customers , and all related appropriate guidance. We recognize revenue under the core principle to depict the transfer of control to our customers in an amount reflecting the consideration we expect to be entitled.
If actual market conditions are less favorable than our assumptions, we may be required to take additional write-downs, which could adversely impact our cost of revenues and operating results. Historically, these write-downs have not been material.
If actual market conditions are less favorable than our assumptions, we may be required to take additional write-downs, which could adversely impact our cost of revenue and operating results. Historically these write-downs have not been material.
The Credit Agreement terminates on June 7, 2026; all advances under the revolving line of credit will become due on such date, or earlier in the event of a default. As of December 31, 2024 and 2023, we had no advances outstanding under the Credit Agreement.
The Credit Agreement terminates on June 7, 2026; all advances under the revolving line of credit will become due on such date, or earlier in the event of a default. As of December 31, 2025 and 2024, we had no advances outstanding under the Credit Agreement.
Accordingly, as of December 31, 2024, our worldwide cash and marketable securities are available to fund capital allocation needs, including capital and internal investments, acquisitions, stock repurchases and/or dividends without incurring significant U.S. federal income taxes.
Accordingly, as of December 31, 2025, our worldwide cash and marketable securities are available to fund capital allocation needs, including capital and internal investments, acquisitions, stock repurchases and/or dividends without incurring significant U.S. federal income taxes.
For more information regarding our accounting policies, see Note 2, Summary of Significant Accounting Policies and Recent Accounting Pronouncements , in our Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. Revenue recognition Product revenues consist of sales to original equipment manufacturers, or OEMs, merchant power supply manufacturers and distributors.
For more information regarding our accounting policies, see Note 2, Summary of Significant Accounting Policies and Recent Accounting Pronouncements , in our Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. Revenue recognition Product revenue consists of sales to original equipment manufacturers, or OEMs, merchant power supply manufacturers and distributors.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Also, although our wafer fabrication and assembly operations are outsourced, as are most of our test operations, a portion of our production costs are fixed in nature. As a result, our unit costs and gross profit margin are impacted by the volume of units we produce.
Also, although 29 Table of Contents our wafer fabrication and assembly operations are outsourced, as are most of our test operations, a portion of our production costs are fixed in nature. As a result, our unit costs and gross profit margin are impacted by the volume of units we produce.
All else being equal, a 10% change in the value of the U.S. dollar compared to the Japanese yen would eventually result in a corresponding change in our gross margin of approximately 1.4%; this sensitivity may increase or decrease depending on the percentage of our wafer supply that we purchase from Japanese suppliers.
All else being equal, a 10% change in the value of the U.S. dollar compared to the Japanese yen would eventually result in a corresponding change in our gross margin of approximately 1.5%; this sensitivity may increase depending on the percentage of our wafer supply that we purchase from Japanese suppliers.
Frequently, distributors need to sell at a price lower than the standard distribution price in order to win business. At the time the distributor invoices its customer 28 Table of Contents or soon thereafter, the distributor submits a “ship-and-debit” price adjustment claim to us to adjust the distributor’s cost from the standard price to the pre-approved lower price.
Frequently, distributors need to sell at a price lower than the standard distribution price in order to win business. At the time the distributor invoices its customer or soon thereafter, the distributor submits a “ship-and-debit” price adjustment claim to us to adjust the distributor’s cost from the standard price to the pre-approved lower price.
In October 2023, our board of directors raised the cash dividend with the declaration of five cash dividends of $0.20 per share to be paid to stockholders of record at the end of the fourth quarter in 2023 (in lieu of the $0.19 per share announced in February 2023) and at the end of each quarter in 2024. 32 Table of Contents In October 2024, our board of directors raised the cash dividend again with the declaration of five cash dividends of $0.21 per share to be paid to stockholders of record at the end of the fourth quarter in 2024 (in lieu of the $0.20 per share announced in October 2023) and at the end of each quarter in 2025.
In October 2024, our board of directors raised the cash dividend again with the declaration of five cash dividends of $0.21 per share to be paid to stockholders of record at the end of the fourth quarter in 2024 (in lieu of the $0.20 per share announced in October 2023) and at the end of each quarter in 2025.
The Credit Agreement was amended with an effective date of June 28, 2023 to include the Secured Overnight Financing Rates (“SOFR”) as interest rate benchmark rates, with all other terms remaining the same.
The Credit Agreement was amended with an effective date of 33 Table of Contents June 28, 2023 to include the Secured Overnight Financing Rates as interest rate benchmark rates, with all other terms remaining the same.
To the extent future ship-and-debit claims significantly exceed amounts estimated, there could be a material impact on our revenues and results of operations. Stock rotation rights grant the distributor the ability to return certain specified amounts of inventory.
To the extent future ship-and- 30 Table of Contents debit claims significantly exceed amounts estimated, there could be a material impact on our revenue and results of operations. Stock rotation rights grant the distributor the ability to return certain specified amounts of inventory.
The following table compares the provision for income taxes for the years ended December 31, 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) 2024 ​ Change ​ 2023 ​ Change ​ 2022 Provision (benefit) for income taxes $ (1.5) ​ ​ (84.9) % ​ $ (9.8) ​ ​ (178.2) % ​ $ 12.6 ​ Effective tax rate ​ (4.8) % ​ ​ ​ ​ (21.4) % ​ ​ ​ ​ 6.9 % In 2024 and 2023, the effective tax rate was lower than the statutory U.S. federal income-tax rates of 21% due to the geographic distribution of our world-wide earnings in lower tax jurisdictions, the impact of federal research tax credits and the recognition of excess tax benefits related to share-based compensation.
The following table compares the provision (benefit) for income taxes for the years ended December 31, 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 Provision (benefit) for income taxes $ (1.1) ​ ​ (24.7) % ​ $ (1.5) ​ ​ (84.9) % ​ $ (9.8) ​ Effective tax rate ​ (5.3) % ​ ​ ​ ​ (4.8) % ​ ​ ​ ​ (21.4) % In 2025 and 2024, our effective tax rate was lower than the statutory U.S. federal income-tax rates of 21% due to the geographic distribution of our world-wide earnings in lower tax jurisdictions, the impact of federal research tax credits and the recognition of excess tax benefits related to share-based compensation.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock trades on the Nasdaq Global Select Market under the symbol “POWI”. As of January 31, 2025, there were approximately 61 stockholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock trades on the Nasdaq Global Select Market under the symbol “POWI”. As of January 30, 2026, there were approximately 68 stockholders of record.
Dividends In February 2023, our board of directors declared dividends of $0.19 per share to be paid to stockholders of record at the end of each quarter in 2023.
Dividends In October 2023, our board of directors declared dividends of $0.20 per share to be paid to stockholders of record at the end of each quarter in 2024.
Results of Operations The following table sets forth statement of income data as a percentage of net revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2024 ​ 2023 ​ 2022 Net revenues ​ 100.0 % ​ 100.0 % ​ 100.0 % Cost of revenues 46.4 ​ 48.5 ​ 43.7 ​ Gross profit 53.6 ​ 51.5 ​ 56.3 ​ Operating expenses: ​ ​ ​ ​ ​ ​ Research and development 24.1 ​ 21.6 ​ 14.4 ​ Sales and marketing 16.2 ​ 14.5 ​ 9.6 ​ General and administrative 9.1 ​ 7.5 ​ 4.4 ​ Other operating expenses, net — ​ — ​ 0.2 ​ Total operating expenses 49.4 ​ 43.6 ​ 28.6 ​ Income from operations 4.2 ​ 7.9 ​ 27.7 ​ Other income 3.1 ​ 2.4 ​ 0.5 ​ Income before income taxes 7.3 ​ 10.3 ​ 28.2 ​ Provision (benefit) for income taxes (0.4) ​ (2.2) ​ 2.0 ​ Net income 7.7 % ​ 12.5 % ​ 26.2 % ​ 29 Table of Contents Comparison of Years Ended December 31, 2024 and 2023 Net revenues.
Results of Operations The following table sets forth statement of income data as a percentage of net revenue for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2025 ​ 2024 ​ 2023 Net revenue ​ 100.0 % ​ 100.0 % ​ 100.0 % Cost of revenue 45.5 ​ 46.4 ​ 48.5 ​ Gross profit 54.5 ​ 53.6 ​ 51.5 ​ Operating expenses: ​ ​ ​ ​ ​ ​ Research and development 22.8 ​ 24.1 ​ 21.6 ​ Sales and marketing 15.3 ​ 16.2 ​ 14.5 ​ General and administrative 9.6 ​ 9.1 ​ 7.5 ​ Other operating expenses 4.4 ​ — ​ — ​ Total operating expenses 52.2 ​ 49.4 ​ 43.6 ​ Income from operations 2.3 ​ 4.2 ​ 7.9 ​ Other income 2.4 ​ 3.1 ​ 2.4 ​ Income before income taxes 4.7 ​ 7.3 ​ 10.3 ​ Provision (benefit) for income taxes (0.3) ​ (0.4) ​ (2.2) ​ Net income 5.0 % ​ 7.7 % ​ 12.5 % ​ Comparison of Years Ended December 31, 2025 and 2024 Net revenue.
Cash from Operating Activities Our operating activities generated cash of $81.2 million and $65.8 million in the years ended December 31, 2024 and 2023, respectively. We generate cash primarily from operating activities in the ordinary course of business.
Cash from Operating Activities Our operating activities generated cash of $111.5 million and $81.2 million in the years ended December 31, 2025 and 2024, respectively. We generate cash primarily from operating activities in the ordinary course of business.
Our gross margin increased in 2024 due to the favorable impact of the dollar/yen exchange rate on our wafer costs, manufacturing efficiencies including the benefit of higher unit volumes on our manufacturing costs per unit, and favorable end-market mix with a greater percentage of sales coming from higher-margin market categories.
Our gross margin increased in 2025 due to manufacturing efficiencies including the benefit of higher unit volumes on our manufacturing costs per unit, and favorable end-market mix with a greater percentage of sales coming from higher-margin market categories.
Financing activities consisted primarily of $55.3 million for the repurchase of our common stock and $44.0 million for the payment of dividends to stockholders, partially offset by proceeds of $6.2 million from the issuance of common stock through our employee stock purchase plan.
Financing activities consisted primarily of $98.1 million for the repurchase of our common stock and $47.2 million for the payment of dividends to stockholders, partially offset by proceeds of $5.3 million from the issuance of common stock through our employee stock purchase plan.
The following table compares gross profit and gross margin for the years ended December 31, 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) 2024 ​ Change ​ 2023 ​ Change ​ 2022 Gross profit $ 224.8 ​ (1.8) % ​ $ 229.0 ​ (37.6) % ​ $ 366.9 ​ Gross margin ​ 53.6 % ​ ​ ​ 51.5 % ​ ​ ​ 56.3 % Our gross margin increased in 2024 as compared to 2023 due to the favorable impact of the dollar/yen exchange rate on our wafer costs, manufacturing efficiencies including the benefit of higher unit volumes on our manufacturing costs per unit, and favorable end-market mix with a greater percentage of sales coming from higher-margin end-market categories.
The following table compares gross profit and gross margin for the years ended December 31, 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 Gross profit $ 241.6 ​ 7.5 % ​ $ 224.8 ​ (1.8) % ​ $ 229.0 ​ Gross margin ​ 54.5 % ​ ​ ​ 53.6 % ​ ​ ​ 51.5 % Our gross margin increased in 2025 as compared to 2024 due to manufacturing efficiencies including the benefit of higher unit volumes on our manufacturing costs per unit, and favorable end-market mix with a greater percentage of sales coming from higher-margin market categories.
International sales represented approximately 98% of net revenues for both 2024 and 2023. Because our industry is intensely price-sensitive, our gross margin (gross profit divided by net revenues) is subject to change based on the relative pricing of solutions that compete with ours. Variations in product mix, end-market mix and customer mix can also cause our gross margin to fluctuate.
Because our industry is intensely price-sensitive, our gross margin (gross profit divided by net revenue) is subject to change based on the relative pricing of solutions that compete with ours. Variations in product mix, end-market mix and customer mix can also cause our gross margin to fluctuate.
No other customers accounted for 10% or more of net revenues during these years. Gross profit. Gross profit is net revenues less cost of revenues.
No other customers accounted for 10% or more of our net revenue in these years. Gross profit. Gross profit is net revenue less cost of revenue.
Power supplies incorporating our products are used with all manner of electronic products including mobile phones, computing and networking equipment, appliances, electronic utility meters, battery-powered tools, industrial controls, and “home-automation,” or “internet of things” applications such as networked thermostats, power strips and security devices. Variations of our power-supply ICs are used for high-voltage power conversion in electric vehicles (“EVs”).
Power supplies incorporating our products are used with all manner of electronic products including industrial controls, “smart” utility meters, appliances, air conditioners, battery-powered tools, building-automation, or “internet-of-things” applications such as networked thermostats and security devices, and mobile devices such as smartphones, tablets and notebook computers. Variations of our power-supply ICs are used for high-voltage power conversion in electric vehicles (“EVs”).
In October 2024, our board of directors authorized the use of an additional $50.0 million for the repurchase of our common stock, with repurchases to be executed according to pre-defined price/volume guidelines. As of December 31, 2024, we had approximately $48.1 million available for future stock repurchases.
In April 2025, our board of directors authorized the use of an additional $50.0 million for the repurchase of our common stock, with repurchases to be executed according to pre-defined price/volume guidelines. As of December 31, 2025, we had exhausted our repurchase authorization and had no amounts available for future stock repurchases.
Authorization of future repurchase programs is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors. There is no expiration date on the plan or the amount currently authorized.
Authorization of future repurchase programs is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors.
The addition of the employees of Odyssey Semiconductor in July 2024 contributed to the increase. Sales and marketing expenses. Sales and marketing (“S&M”) expenses consist primarily of employee-related expenses, including salaries and stock-based compensation, and commissions to sales representatives, as well as facilities expenses, including expenses associated with our regional sales and support offices.
Sales and marketing expenses. Sales and marketing (“S&M”) expenses consist primarily of employee-related expenses, including salaries and stock-based compensation, and commissions to sales representatives, as well as facilities expenses, including expenses associated with our regional sales and support offices.
Our financing activities in the year ended December 31, 2023, resulted in a $93.0 million net use of cash.
Cash from Financing Activities Our financing activities in the year ended December 31, 2025, resulted in a $139.9 million net use of cash.
The reserve for ship-and-debit claims decreased by $9.6 million between December 31, 2024 and December 31, 2023, primarily due to lower inventory levels held by distributors. Historically, actual price adjustments for ship-and-debit claims have not materially differed from those estimated when determining the transaction price.
The reserve for ship-and-debit claims increased by $7.2 million between December 31, 2025 and December 31, 2024, primarily due to higher inventory levels held by distributors in our industrial end-market. Historically, actual price adjustments for ship-and-debit claims have not materially differed from those estimated when determining the transaction price.
Our approximate net revenue mix by end-markets served in 2024, 2023 and 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ End Market 2024 ​ 2023 ​ 2022 Communications ​ 12 % ​ 29 % ​ 21 % Computer 14 % ​ 12 % ​ 10 % Consumer 39 % ​ 27 % ​ 33 % Industrial 35 % ​ 32 % ​ 36 % ​ Sales to customers outside of the United States were $412.5 million and $435.9 million in 2024 and 2023, respectively, representing 98% of net revenues in both 2024 and 2023.
Our approximate net revenue mix by end-markets served in 2025, 2024 and 2023 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ End Market ​ ​ ​ 2025 ​ 2024 ​ 2023 Communications ​ 12 % ​ 12 % ​ 29 % Computer 13 % ​ 14 % ​ 12 % Consumer 37 % ​ 39 % ​ 27 % Industrial 38 % ​ 35 % ​ 32 % ​ International sales, consisting of sales to customers outside of the United States of America based on “bill to” customer locations, were $436.6 million and $412.5 million in 2025 and 2024, respectively, representing 98% of net revenue in both 2025 and 2024.
Our gross profit, defined as net revenues less cost of revenues, was $224.8 million or 54% of net revenues in 2024, compared to $229.0 million or 52% of net revenues in 2023.
Our gross profit, defined as net revenue less cost of revenue, was $241.6 million or 55% of net revenue in 2025, compared to $224.8 million or 54% of net revenue in 2024.
Our investing activities in the year ended December 31, 2023 resulted in a $14.2 million net use of cash, consisting primarily of $20.9 million for purchases of property and equipment, primarily production-related machinery and equipment, partially offset by $6.7 million of proceeds from sales and maturities of marketable securities, net of purchases.
Cash from Investing Activities Our investing activities in the year ended December 31, 2025, generated $36.2 million of cash, consisting primarily of $60.5 million of proceeds from sales and maturities of marketable securities, net of purchases. This amount was partially offset by the use of $24.4 million for purchases of property and equipment, primarily production-related machinery and equipment.
In addition to operating lease and purchase obligations, we have a contractual obligation related to income tax as of December 31, 2024, which primarily comprises unrecognized tax benefits of approximately $15.2 million, and was classified as contra deferred tax assets or long-term income taxes payable in our consolidated balance sheet.
(2) Purchase obligations represent commitments to our suppliers and other parties for the purchases of goods and services, which primarily consist of wafer and other inventory purchases, assembly and other manufacturing services, and purchases of property and equipment. 35 Table of Contents In addition to operating lease and purchase obligations, we have a contractual obligation related to income tax as of December 31, 2025, which primarily comprises unrecognized tax benefits of approximately $15.3 million, and was classified as contra deferred tax assets or long-term income taxes payable in our consolidated balance sheet.
The declaration of any future cash dividend is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash dividends are in the best interest of our stockholders.
In October 2025, our board of directors raised the quarterly cash dividend with the declaration of four cash dividends of $0.215 per share to be paid to stockholders of record at the end of each quarter in 2026. 34 Table of Contents The declaration of any future cash dividend is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash dividends are in the best interest of our stockholders.
The stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company/Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Power Integrations, Inc. ​ 100.00 ​ 166.78 ​ 190.35 ​ 148.28 ​ 171.35 ​ 130.27 Nasdaq Composite 100.00 ​ 144.92 ​ 177.06 ​ 119.45 ​ 172.77 ​ 223.87 PHLX Semiconductor (SOX) ​ 100.00 ​ 153.66 ​ 219.51 ​ 142.94 ​ 238.72 ​ 287.31 (1) This Section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of Power Integrations under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. ​ Item 6. [Reserved ] 26 Table of Contents Item 7.
The stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company/Index ​ ​ ​ 12/31/2020 ​ ​ ​ 12/31/2021 ​ ​ ​ 12/31/2022 ​ ​ ​ 12/31/2023 ​ ​ ​ 12/31/2024 ​ ​ ​ 12/31/2025 Power Integrations, Inc. ​ 100.00 ​ 114.13 ​ 88.91 ​ 102.74 ​ 78.10 ​ 45.83 Nasdaq Composite 100.00 ​ 122.18 ​ 82.43 ​ 119.22 ​ 154.48 ​ 187.14 PHLX Semiconductor (SOX) ​ 100.00 ​ 142.85 ​ 93.02 ​ 155.35 ​ 186.98 ​ 268.23 (1) This Section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of Power Integrations under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. ​ Item 6. [Reserved ] 28 Table of Contents Item 7.
As of December 31, 2024 and 2023, we had working capital, defined as current assets less current liabilities, of approximately $458.7 million and $462.7 million, respectively. 31 Table of Contents We have a Credit Agreement with Wells Fargo Bank, National Association (the "Credit Agreement") that provides us with a $75.0 million revolving line of credit to use for general corporate purposes with a $20.0 million sub-limit for the issuance of standby and trade letters of credit.
We have a Credit Agreement with Wells Fargo Bank, National Association (the "Credit Agreement") that provides us with a $75.0 million revolving line of credit to use for general corporate purposes with a $20.0 million sub-limit for the issuance of standby and trade letters of credit.
Stock Repurchases Over the years our board of directors has authorized the use of funds to repurchase shares of our common stock, including $100.0 million in October 2022 with repurchases to be executed according to pre-defined price/volume guidelines. As of December 31, 2022, we had $81.3 million remaining under our stock-repurchase program.
Stock Repurchases Over the years our board of directors has authorized the use of funds to repurchase shares of our common stock, including $50.0 million in each of October 2024 and April 2025, with repurchases to be executed according to pre-defined price/volume guidelines.
The following table compares R&D expenses for the years ended years ended December 31, 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) 2024 ​ Change ​ 2023 ​ Change ​ 2022 R&D expenses $ 100.8 ​ 4.9 % ​ $ 96.1 ​ 2.3 % ​ $ 93.9 ​ Headcount (at period end) ​ ​ 311 ​ ​ ​ ​ ​ ​ 282 ​ ​ ​ ​ ​ ​ 310 ​ ​ 30 Table of Contents R&D expenses increased in 2024 compared to 2023 primarily due to increased stock-based compensation expense related to performance-based awards and higher salaries- and benefit-related expenses due to increased headcount and annual salary increases .
The following table compares R&D expenses for the years ended December 31, 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 R&D expenses $ 101.1 ​ ​ 0.3 % ​ $ 100.8 ​ 4.9 % ​ $ 96.1 ​ Headcount (at period end) ​ ​ 301 ​ ​ ​ ​ ​ ​ 311 ​ ​ ​ ​ ​ ​ 282 ​ ​ R&D expenses increased in 2025 compared to 2024 primarily due to higher salaries and expenses for outside engineering services, partially offset by decreased stock-based compensation expense.
The following customers represented 10% or more of our net revenues for the respective years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer 2024 ​ 2023 ​ 2022 Avnet 30 % ​ 27 % ​ 31 % Honestar Technologies Co., Ltd. ​ 11 % ​ 18 % ​ 11 % Salcomp Group * ​ ​ 10 % ​ * ​ * Total customer revenue was less than 10% of net revenues.
Direct sales to OEMs and merchant power supply manufacturers accounted for the remainder in each of the corresponding years. 31 Table of Contents The following customers represented 10% or more of our net revenue for the respective years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer ​ ​ ​ 2025 ​ 2024 ​ 2023 Avnet 32 % ​ 30 % ​ 27 % Salcomp Group 11 % ​ * ​ ​ 10 % Honestar Technologies Co., Ltd. ​ * ​ ​ 11 % ​ 18 % * Total customer revenue was less than 10% of net revenue.
These sources of cash were partially offset by a $27.7 million increase in inventories due to softening demand during the year, a $18.2 million decrease in taxes payable and accrued liabilities, a $5.4 million decrease in accounts payable (excluding payables related to property and equipment) due to timing of payments and a $1.2 million increase in prepaid expenses and other assets .
Sources of cash included a $9.3 million decrease in accounts receivable, a $10.5 million increase in taxes payable and accrued liabilities, a $3.3 million increase in accounts payable (excluding payables related to property and equipment) due to timing of payments. These sources of cash were partially offset by a $1.3 million increase in inventories.
Authorization of future repurchase programs is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors. Capital Expenditures Cash paid for property and equipment in the year ended December 31, 2024 was $17.3 million.
Authorization of future repurchase programs is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors.
Although power supplies using our products are designed and distributed worldwide, most of these power supplies are manufactured by our customers in Asia. As a result, sales to this region accounted for 84% of our net revenues in both 2024 and 2023.
Although power converters using our products are distributed to end markets worldwide, most are manufactured in Asia. As a result, sales to this region represented approximately 84% of our net revenue in both 2025 and 2024.
The table below compares G&A expenses for the years ended December 31, 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) 2024 ​ Change ​ 2023 ​ Change ​ 2022 G&A expenses $ 38.2 ​ 15.0 % ​ $ 33.2 ​ 15.0 % ​ $ 28.9 ​ Headcount (at period end) ​ ​ 84 ​ ​ ​ ​ ​ ​ 79 ​ ​ ​ ​ ​ ​ 72 ​ G&A expenses increased i n 2024 primarily due to increased stock-based compensation expense related to performance-based awards, higher salaries- and benefit-related expenses due to increased headcount and annual salary increases as well as increased professional services.
The table below compares G&A expenses for the years ended December 31, 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 G&A expenses $ 42.7 ​ ​ 11.8 % ​ $ 38.2 ​ 15.0 % ​ $ 33.2 ​ Headcount (at period end) ​ ​ 84 ​ ​ ​ ​ ​ ​ 84 ​ ​ ​ ​ ​ ​ 79 ​ G&A expenses increased i n 2025 compared to 2024 primarily due to increased professional and legal services and higher salary- and benefit-related expenses. 32 Table of Contents Other operating expenses.
The following table compares sales and marketing expenses for the years ended December 31, 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) 2024 ​ Change ​ 2023 ​ Change ​ 2022 Sales and marketing expenses ​ $ 67.8 ​ 5.0 % ​ $ 64.6 ​ 3.2 % ​ $ 62.6 ​ Headcount (at period end) ​ ​ 330 ​ ​ ​ ​ ​ ​ 317 ​ ​ ​ ​ ​ ​ 320 ​ S&M expenses increased in 2024 compared to 2023 primarily due to increased stock-based compensation expense related to performance-based awards and higher salaries- and benefit-related expenses due to increased headcount and annual salary increases.
The following table compares sales and marketing expenses for the years ended December 31, 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 Sales and marketing expenses ​ $ 68.0 ​ 0.2 % ​ $ 67.8 ​ 5.0 % ​ $ 64.6 ​ Headcount (at period end) ​ ​ 335 ​ ​ ​ ​ ​ ​ 330 ​ ​ ​ ​ ​ ​ 317 ​ S&M expenses in 2025 were flat compared to 2024.
The following table compares other income for the years ended December 31, 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) 2024 ​ Change ​ 2023 ​ Change ​ 2022 Other income $ 12.8 ​ ​ 18.2 % ​ $ 10.8 ​ 259.9 % ​ $ 3.0 ​ Other income increased in 2024 due primarily to an increase in interest income resu lting from higher yields earned on our investments .
The following table compares other income for the years ended December 31, 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in millions) ​ ​ ​ 2025 ​ Change ​ 2024 ​ Change ​ 2023 Other income $ 10.8 ​ ​ (15.9) % ​ $ 12.8 ​ 18.2 % ​ $ 10.8 ​ Other income decreased in 2025 primarily due to lower interest income.
In 2023, our net income was $55.7 million, which included non-cash expenses of $35.2 million of depreciation, $28.5 million of stock-based compensation and $2.2 million of intangibles amortization partially offset by a $9.2 million increase in deferred income taxes. Sources of cash included a $6.6 million decrease in accounts receivable.
In 2025, our net income was $22.1 million, which included non-cash expenses of $27.2 million of depreciation, $39.7 million of stock-based compensation, $0.9 million decrease in deferred income taxes and $0.8 million of intangibles amortization partially offset by a $1.1 million of accretion of discount on marketable securities .
We expect international sales to continue to account for a large portion of our net revenues for the foreseeable future. Sales to distributors accounted for 70% and 69% of our net revenues in 2024 and 2023, respectively, with direct sales to OEMs and merchant power supply manufacturers accounting for the remainder in each of the corresponding years.
We expect international sales, and sales to the Asia region in particular, to continue to account for a large portion of our net revenue in the future. Sales to distributors accounted for 69% and 70% of our net revenue in 2025 and 2024, respectively.
We expect capital expenditures in fiscal 2025 to be primarily for machinery and equipment for use in the manufacture of our products to support future growth. We expect to fund these capital expenditures with cash on hand as well as cash provided by future operations.
Capital Expenditures Cash paid for property and equipment in the year ended December 31, 2025 was $24.4 million. We expect capital expenditures in fiscal 2026 to be primarily for machinery and equipment for use in the manufacture of our products to support future growth.
Additionally, in 2024 and 2023, our effective tax rate was favorably impacted by a discrete item associated with the release of unrecognized tax benefits. These benefits were offset by U.S. tax on foreign income, known as global intangible low-taxed income. The primary jurisdiction from which our foreign earnings are derived is the Cayman Islands, which is a non-taxing jurisdiction.
Additionally, in 2025 and 2024, our effective tax rate was favorably impacted by discrete items associated with the release of unrecognized tax benefits caused by an expiration in the statute of limitations on these positions. These benefits were offset by U.S. tax on foreign income, known as Net Controlled Foreign Corporation Tested Income (“NCTI”).
The following table summarizes repurchases of our common stock made under our publicly announced repurchase program during the fourth quarter of fiscal 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate Dollar Value ​ ​ ​ ​ ​ ​ Shares Purchased ​ that May Yet be ​ ​ Total ​ Average ​ as Part of ​ Repurchased Under the ​ ​ Number of ​ Price Paid ​ Publicly Announced ​ Plans or Program Period ​ Shares Purchased ​ Per Share ​ Plans or Programs ​ (In millions) October 1, 2024 to October 31, 2024 ​ — ​ ​ — ​ — ​ $ 50.0 November 1, 2024 to November 30, 2024 ​ 13,903 ​ $ 61.81 ​ 13,903 ​ $ 49.1 December 1, 2024 to December 31, 2024 ​ 16,445 ​ $ 63.38 ​ 16,445 ​ $ 48.1 Total ​ 30,348 ​ ​ ​ ​ 30,348 ​ ​ ​ ​ 25 Table of Contents Performance Graph ( 1 ) The following graph shows the cumulative total return on an investment of $100 in cash on December 31, 2019, through December 31, 2024, in our common stock, the Nasdaq Composite Index and the PHLX Semiconductor Sector Index (SOX) and assuming that all dividends were reinvested.
The following table summarizes repurchases of our common stock made under our publicly announced repurchase program during the fourth quarter of fiscal 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ Approximate Dollar Value ​ ​ ​ ​ ​ Shares Purchased ​ that May Yet be ​ Total ​ Average ​ as Part of ​ Repurchased Under the ​ Number of ​ Price Paid ​ Publicly Announced ​ Plans or Program Period Shares Purchased ​ Per Share ​ Plans or Programs ​ (In millions) October 1, 2025 to October 31, 2025 — ​ ​ — ​ — ​ ​ — November 1, 2025 to November 30, 2025 — ​ ​ — ​ — ​ ​ — December 1, 2025 to December 31, 2025 — ​ ​ — ​ — ​ ​ — Total — ​ ​ ​ ​ — ​ ​ ​ Dividends The declaration of any future cash dividend is at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination that cash dividends are in the best interest of our stockholders.
Liquidity and Capital Resources We had $300.0 million in cash, cash equivalents and short-term marketable securities at December 31, 2024 compared to $311.6 million at December 31, 2023.
For additional details, refer to Note 11, Provision ( Benefit) for Income Taxes , in our Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K. Liquidity and Capital Resources We had $249.5 million in cash, cash equivalents and short-term marketable securities at December 31, 2025 compared to $300.0 million at December 31, 2024.
Net revenues consist of revenues from product sales, which are calculated net of returns and allowances. Revenues declined in 2024 compared to the prior year driven by lower sales into the communications end-market, primarily reflecting greater use of Chinese-made components in chargers manufactured for Chinese smartphone vendors, as well as increased decoupling of smartphone handsets and chargers.
Net revenue consists of revenue from product sales, which are calculated net of returns and allowances. Revenue increased in 2025 compared to the prior year due primarily to higher sales in the industrial end-market .
Income earned in other foreign jurisdictions was not material. We have not been granted any incentivized tax rates and do not operate under tax holidays in any jurisdiction. For additional details, refer to Note 11, Provision (Benefit) for Income Taxes , in our Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.
The primary jurisdiction from which our foreign earnings are derived is the Cayman Islands, which is a non-taxing jurisdiction. Income earned in other foreign jurisdictions was not material. We have not been granted any incentivized tax rates and do not operate under tax holidays in any jurisdiction.
Inventories at distributors of our products have decreased significantly in recent periods, enabling our sales to align more closely with end-market demand; this contributed to an increase in net revenues in the fourth quarter of 2024 compared to the fourth quarter of 2023. 27 Table of Contents Our top ten customers, including distributors that resell to OEMs and merchant power supply manufacturers, accounted for approximately 79% and 80% of net revenues in 2024 and 2023, respectively.
Our top ten customers, including distributors that resell to OEMs and merchant power supply manufacturers, accounted for approximately 81% and 79% of net revenue in 2025 and 2024, respectively. International sales represented approximately 98% of net revenue in each of 2025 and 2024.
Removed
Our net revenues were $419.0 million and $444.5 million in 2024 and 2023, respectively. The decline in revenues in 2024 was driven by lower sales into the communications end-market, primarily reflecting greater use of Chinese-made components in chargers manufactured for Chinese smartphone vendors, as well as increased decoupling of smartphone handsets and chargers.
Added
See the section titled “Item 7. Management’s Discussion and Analysis—Liquidity and Capital Resources—Dividends” included in this Annual Report on Form 10-K for the amount of cash dividends we have paid.
Removed
Revenues from the consumer, industrial and computer categories increased compared to the prior year.
Added
Recent Sales of Unregistered Securities None. 27 Table of Contents Performance Graph ( 1 ) The following graph shows the cumulative total return on an investment of $100 in cash on December 31, 2020, through December 31, 2025, in our common stock, the Nasdaq Composite Index and the PHLX Semiconductor Sector Index (SOX) and assuming that all dividends were reinvested.
Removed
We believe that demand for our products has been negatively affected in recent years by an array of macroeconomic and geopolitical factors including reduced consumer spending and a reduction in home sales in response to inflation and higher interest rates, general economic weakness in China, particularly in the residential real estate market, weaker industrial activity and the conflicts in Ukraine and the Middle East.
Added
Our net revenue was $443.5 million and $419.0 million in 2025 and 2024, respectively.
Removed
We believe these factors have exacerbated the effects of a cyclical downturn in the semiconductor industry; such downturns are commonly experienced following periods of strong growth­‒such as that observed during the COVID-19 pandemic‒during which supply-chain participants tend to accumulate excess inventories.
Added
The increase in revenue in 2025 was primarily driven by higher sales in the industrial end-market, including growth in sales of our gate-driver products, as well as increased sales of our ICs for a broad range of applications including electronic utility meters, electric vehicles and battery-powered tools.
Removed
Total operating expenses in 2024 were $206.8 million, an increase of $12.9 million as compared to 2023, primarily due to increased stock-based compensation expense and higher salary- and benefit-related expenses driven by increased headcount, annual salary increases and higher costs associated with employee health insurance and other benefits.
Added
Total operating expenses in 2025 were $231.5 million, an increase of $24.6 million as compared to 2024, primarily due to higher stock-based compensation expense as a result of an award modification associated with the retirement of our former chief executive officer (refer to Note 7, Stock-Based Compensation , in our Notes to Consolidated Financial Statements for details) and expenses incurred related to an employee litigation matter (refer to Note 14, Legal Proceedings and Contingencies , in our Notes to Consolidated Financial Statements for details) as well as higher expenses for outside engineering services and legal services.
Removed
Revenues from the consumer, industrial and computer end-market categories increased compared to the prior year.
Added
Other operating expenses were $19.7 million in 2025. We recognized expenses of $11.3 million stemming from an employee litigation matter (refer to Note 14, Legal Proceedings and Contingencies , in our Notes to Consolidated Financial Statements for details).
Removed
In 2023, we repurchased 0.8 million shares for $55.3 million, leaving $26.0 million in funds authorized as of December 31, 2023. We exhausted this authorization in April 2024. In October 2024, our board of directors authorized the use of an additional $50.0 million for the repurchase of our common stock, with repurchases to be executed according to pre-defined price/volume guidelines.
Added
In addition, we recognized stock-based compensation expense of $8.4 million as a result of an award modification associated with the retirement of our former chief executive officer (refer to Note 7, Stock-Based Compensation , in our Notes to Consolidated Financial Statements for details). Other income .
Removed
As of December 31, 2024, $48.1 million remained under this repurchase authorization; the program has no expiration date. In 2024, we repurchased a total of 0.4 million shares of the Company’s common stock for $27.9 million.
Added
The rate was further reduced by the release of federal uncertain tax position caused by a expiration in the statute of limitations on these positions. These benefits were partially offset by foreign income subject to U.S. tax, known as Net Controlled Foreign Corporation Tested Income ("NCTI").

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThis sensitivity analysis applies a change in the U.S. dollar value of 5% and 10%. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 (in thousands of USD) 5% 10% Swiss franc and euro foreign exchange impact ​ $ 132 ​ $ 263 ​ 34 Table of Contents The foreign exchange rate fluctuation between the U.S. dollar versus the Swiss franc and euro is recorded in other income in our consolidated statements of income.
Biggest changeThis sensitivity analysis applies a change in the U.S. dollar value of 5% and 10%. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 (in thousands of USD) ​ ​ ​ 5% ​ ​ ​ 10% Swiss franc and euro foreign exchange impact ​ $ 191 ​ $ 381 ​ The foreign exchange rate fluctuation between the U.S. dollar versus the Swiss franc and euro is recorded in other income in our consolidated statements of income.
To minimize market risk, we invest in high-credit quality issuers and, by policy, limit the amount of credit exposure to any one issuer, and therefore if market interest rates were to increase or decrease by 10% from interest rates as of December 31, 2024 or December 31, 2023, the increase or decrease in the fair market value of our portfolio on these dates would not have been material.
To minimize market risk, we invest in high-credit quality issuers and, by policy, limit the amount of credit exposure to any one issuer, and therefore if market interest rates were to increase or decrease by 10% from interest rates as of December 31, 2025 or December 31, 2024, the increase or decrease in the fair market value of our portfolio on these dates would not have been material.
As of December 31, 2024, our primary transactional currency was the U.S. dollar; in addition, we hold cash in Swiss francs and euros to fund the operation of our Swiss subsidiary. Cash balances held in foreign countries are subject to local banking laws and may bear higher or lower risk than cash deposited in the United States.
As of December 31, 2025, our primary transactional currency was the U.S. dollar; in addition, we hold cash in Swiss francs and euros to fund the operation of our Swiss subsidiary. Cash balances held in foreign countries are subject to local banking laws and may bear higher or lower risk than cash deposited in the United States.
At December 31, 2024 and 2023, we held primarily cash equivalents and short-term investments with fixed interest rates. We do not hold any instruments for trading purposes. Our investment securities are subject to market interest rate risk and will vary in value as market interest rates fluctuate.
At December 31, 2025 and 2024, we held primarily cash equivalents and short-term investments with fixed interest rates. We do not hold any instruments for trading purposes. Our investment securities are subject to market interest rate risk and will vary in value as market interest rates fluctuate.
As of December 31, 2024 and 2023, we did not have an open foreign currency hedge program utilizing foreign currency forward exchange contracts. With two of our major suppliers, Seiko Epson Corporation (“Epson”) and ROHM Lapis Semiconductor Co., Ltd.
As of December 31, 2025 and 2024, we did not have an open foreign currency hedge program utilizing foreign currency forward exchange contracts. With two of our major suppliers, Seiko Epson Corporation (“Epson”) and ROHM Lapis Semiconductor Co., Ltd.
All else being equal, a 10% change in the value of the U.S. dollar compared to the Japanese yen would eventually result in a corresponding change in our gross margin of approximately 1.4%; this sensitivity may increase or decrease depending on the percentage of our wafer supply that we purchase from some of our Japanese suppliers and could subject our gross profit and operating results to the potential for material fluctuations. ​ 35 Table of Contents
All else being equal, a 10% change in the value of the U.S. dollar compared to the Japanese yen would eventually result in a corresponding change in our gross margin of approximately 1.5%; this sensitivity may increase or decrease depending on the percentage of our wafer supply that we purchase from some of our Japanese suppliers and could subject our gross profit and operating results to the potential for material fluctuations. ​ 37 Table of Contents
The following represents the potential impact on our pretax income from a change in the value of the U.S. dollar compared to the Swiss franc and euro as of December 31, 2024.
The following represents the potential impact on our pretax income from a change in the value of the U.S. dollar compared to the Swiss franc and euro as of December 31, 2025.
Each year, our management and these suppliers review and negotiate pricing; the negotiated pricing is denominated in U.S. dollars but is subject to contractual exchange rate provisions. The fluctuation in the exchange rate is shared equally between us and each of these suppliers.
Each year, our management and these suppliers review and negotiate pricing; the negotiated pricing is denominated in 36 Table of Contents U.S. dollars but is subject to contractual exchange rate provisions. The fluctuation in the exchange rate is shared equally between us and each of these suppliers.

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