third quarter of 2026
Filed Nov 4, 2026Revenue increased five percent sequentially to $125.5 million; GAAP earnings were $0.32 per diluted share; non-GAAP earnings were $0.46 per diluted share.
Third-quarter revenue increased both sequentially and year over year, while GAAP and non-GAAP profitability, operating margin and operating cash flow improved materially from the comparison periods. Fourth-quarter revenue guidance spans a range that includes sequentially lower revenue at its low end.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net revenue, three months ended September 30, 2026GAAP | $125.5M | up five percent | up six percent |
| Net revenue, nine months ended September 30, 2026GAAP | $352.7M | – | – |
| Cost of revenue, three months ended September 30, 2026GAAP | 55.76M | – | – |
| Cost of revenue, nine months ended September 30, 2026GAAP | 161.4M | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $69.72M | – | – |
| GAAP gross margin, three months ended September 30, 2026GAAP | 55.6 % | – | – |
| Non-GAAP gross profit, three months ended September 30, 2026non-GAAP | $69.31M | – | – |
| Non-GAAP gross margin, three months ended September 30, 2026non-GAAP | 55.2 % | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $191.3M | – | – |
| GAAP gross margin, nine months ended September 30, 2026GAAP | 54.2 % | – | – |
| Non-GAAP gross profit, nine months ended September 30, 2026non-GAAP | $192.7M | – | – |
| Non-GAAP gross margin, nine months ended September 30, 2026non-GAAP | 54.6 % | – | – |
| Research and development expense, three months ended September 30, 2026GAAP | 25.09M | – | – |
| Selling, general and administrative expense, three months ended September 30, 2026GAAP | 27.52M | – | – |
| Other operating expenses (income), three months ended September 30, 2026GAAP | −2.01M | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | 50.59M | – | – |
| Non-GAAP operating expenses, three months ended September 30, 2026non-GAAP | $42.43M | – | – |
| Income (loss) from operations, three months ended September 30, 2026GAAP | 19.13M | – | – |
| GAAP operating margin, three months ended September 30, 2026GAAP | 15.2 % | – | – |
| Non-GAAP income from operations, three months ended September 30, 2026non-GAAP | $26.88M | – | – |
| Non-GAAP operating margin, three months ended September 30, 2026non-GAAP | 21.4 % | – | – |
| Income (loss) from operations, nine months ended September 30, 2026GAAP | 29.48M | – | – |
| GAAP operating margin, nine months ended September 30, 2026GAAP | 8.4 % | – | – |
| Non-GAAP income from operations, nine months ended September 30, 2026non-GAAP | $59.84M | – | – |
| Non-GAAP operating margin, nine months ended September 30, 2026non-GAAP | 17.0 % | – | – |
| Other income, three months ended September 30, 2026GAAP | 2.08M | – | – |
| Provision for (benefit from) income taxes, three months ended September 30, 2026GAAP | 2.88M | – | – |
| GAAP effective tax rate, three months ended September 30, 2026GAAP | 13.6 % | – | – |
| Non-GAAP provision for income taxes, three months ended September 30, 2026non-GAAP | $2.86M | – | – |
| Non-GAAP effective tax rate, three months ended September 30, 2026non-GAAP | 9.9 % | – | – |
| Net income (loss), three months ended September 30, 2026GAAP | $18.32M | – | – |
| GAAP diluted earnings (loss) per share, three months ended September 30, 2026GAAP | $ 0.32 | – | – |
| Non-GAAP net income, three months ended September 30, 2026non-GAAP | $26.10M | – | – |
| Non-GAAP net income per share (diluted), three months ended September 30, 2026non-GAAP | $ 0.46 | – | – |
| Net income, nine months ended September 30, 2026GAAP | $31.45M | – | – |
| GAAP diluted earnings per share, nine months ended September 30, 2026GAAP | $ 0.56 | – | – |
| Non-GAAP net income, nine months ended September 30, 2026non-GAAP | $60.86M | – | – |
| Non-GAAP net income per share (diluted), nine months ended September 30, 2026non-GAAP | $ 1.08 | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | 42.57M | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | 84.59M | – | – |
| Purchases of property and equipment, three months ended September 30, 2026GAAP | −6.07M | – | – |
| Free cash flow, nine months ended September 30, 2026other | $72.22M | – | – |
| Cash and cash equivalents, September 30, 2026GAAP | $96.83M | – | – |
| Short-term investments, September 30, 2026GAAP | 191.3M | – | – |
| Inventories, September 30, 2026GAAP | 150.3M | – | – |
| Total assets, September 30, 2026GAAP | $789.4M | – | – |
| Total liabilities, September 30, 2026GAAP | 92.14M | – | – |
| Total stockholders' equity, September 30, 2026GAAP | 697.3M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Communications revenue mix by end market, three months ended September 30, 2026Revenue mix by end market. | 12 % | – | – |
| Computer revenue mix by end market, three months ended September 30, 2026Revenue mix by end market. | 13 % | – | – |
| Consumer revenue mix by end market, three months ended September 30, 2026Revenue mix by end market. | 32 % | – | – |
| Industrial revenue mix by end market, three months ended September 30, 2026Continued strength in the industrial market; revenue is up 13 percent year-to-date. | 43 % | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
fourth quarter of 2026 outlook
- Revenue$118.0 million to $126.0 million
- Gross marginGAAP gross margin: 54.0 percent to 55.0 percent; non-GAAP gross margin: 54.5 percent to 55.5 percent
- Operating expensesGAAP operating expenses: $53.0 million to $54.0 million; non-GAAP operating expenses: $42.5 million to $43.5 million
- NoteGAAP operating margin: 10.0 percent to 12.0 percent
- Notenon-GAAP operating margin: 19.0 percent to 21.0 percent
Capital returns
- Power Integrations paid a dividend of $0.215 per share on September 30, 2026 to stockholders of record as of August 31, 2026.
- A dividend of $0.215 per share will be paid on December 31, 2026, to stockholders of record as of November 30, 2026.
- The company expects to pay quarterly dividends of $0.22 per share for each of the four quarters of 2027.
- Payments of dividends to stockholders were (12,011) (in thousands) for the three months ended September 30, 2026 and (35,848) (in thousands) for the nine months ended September 30, 2026.
- Repurchase of common stock was — for the three months ended September 30, 2026 and — for the nine months ended September 30, 2026.
What drove it
- Revenue growth was driven by PowiGaN™ products and continued strength in the industrial market.
- Industrial revenue was up 13 percent year-to-date.
- The company cited expense discipline and profitability as contributors to strong earnings growth.
- The company identified AI and electrification as creating demand for efficiency and power-density advances.
Concerns
- Fourth-quarter revenue guidance of $118.0 million to $126.0 million includes a low end below third-quarter revenue of $125.5 million.
- The company identified risks from tariffs, global economic and geopolitical conditions, competition, component costs, exchange rates, product development delays, defects and market acceptance.
- Non-GAAP results exclude stock-based compensation, acquisition-related intangible-asset amortization, an accrual for a judgment in a legal matter, restructuring charges and tax effects of these items.
What to watch
- Fourth-quarter revenue within the $118.0 million to $126.0 million outlook range.
- Fourth-quarter GAAP gross margin outlook of 54.0 percent to 55.0 percent and non-GAAP gross margin outlook of 54.5 percent to 55.5 percent.
- Fourth-quarter GAAP operating-expense outlook of $53.0 million to $54.0 million and non-GAAP operating-expense outlook of $42.5 million to $43.5 million.
- Execution of PowiGaN™ products and industrial-market demand.
- The anticipated $0.215 per share December 31, 2026 dividend and quarterly dividends of $0.22 per share during 2027.
Balance sheet and cash flow
- Cash and cash equivalents were $ 96,835 (in thousands) at September 30, 2026, compared with $ 58,755 (in thousands) at December 31, 2025.
- Short-term investments were 191,278 (in thousands) at September 30, 2026, compared with 190,755 (in thousands) at December 31, 2025.
- Inventories were 150,293 (in thousands) at September 30, 2026, compared with 166,887 (in thousands) at December 31, 2025.
- Net cash provided by operating activities was 42,569 (in thousands) for the three months ended September 30, 2026 and 84,594 (in thousands) for the nine months ended September 30, 2026.
- Free cash flow was $ 72,224 (in thousands) for the nine months ended September 30, 2026.
- Net cash used in financing activities was (9,617) (in thousands) for the three months ended September 30, 2026 and (30,764) (in thousands) for the nine months ended September 30, 2026.
Analysis
Power Integrations reported third-quarter revenue of $125.5 million, up five percent sequentially and up six percent from the third quarter of 2025. The company attributed the sequential increase to PowiGaN™ products and continued industrial-market strength. Industrial represented 43 % of third-quarter revenue mix, the largest reported end-market mix category, while management stated that industrial revenue was up 13 percent year-to-date.
Profitability improved sharply. GAAP income from operations was $ 19,125 (in thousands), versus $ 8,900 (in thousands) in the prior quarter and a GAAP operating loss of (3,953) (in thousands) a year earlier. GAAP operating margin was 15.2 %, compared with 7.5 % sequentially and (3.3 %) a year earlier. Non-GAAP operating margin was 21.4 %, compared with 17.1 % in the prior quarter and 15.2 % in the third quarter of 2025. GAAP diluted EPS was $ 0.32 and non-GAAP diluted EPS was $ 0.46.
Cash generation strengthened in the quarter. Net cash provided by operating activities was 42,569 (in thousands), compared with 29,854 (in thousands) in the third quarter of 2025. Cash and cash equivalents were $ 96,835 (in thousands) at September 30, 2026, and short-term investments were 191,278 (in thousands). The company paid a $0.215 per share dividend on September 30, 2026, has declared a further $0.215 per share payment for December 31, 2026, and expects quarterly dividends of $0.22 per share for each quarter of 2027.
For the fourth quarter, revenue guidance is $118.0 million to $126.0 million. The outlook calls for GAAP gross margin of 54.0 percent to 55.0 percent and non-GAAP gross margin of 54.5 percent to 55.5 percent, alongside GAAP operating margin of 10.0 percent to 12.0 percent and non-GAAP operating margin of 19.0 percent to 21.0 percent. The guide therefore places the key focus on whether PowiGaN™ and industrial demand sustain revenue near the upper end of the range while expense discipline supports the guided margin profile.
Management, verbatim
Revenue grew five percent over the prior quarter driven by PowiGaN™ products as well as continued strength in the industrial market, where revenue is up 13 percent year-to-date. We also delivered strong earnings growth in the quarter reflecting our continued focus on expense discipline and profitability. Power is becoming a critical constraint thanks to AI and electrification, calling for dramatic advances in efficiency and power density. Our high-voltage technology and system expertise are well aligned with these challenges, and we are excited about our product roadmap and the opportunities ahead to drive shareholder value.
Jen Lloyd, CEO
Not in the filing
stated, not guessed- Previous-quarter free cash flow was not reported.
- Third-quarter free cash flow was not reported.
- A debt balance at September 30, 2026 was not reported.
- Dollar revenue by end market was not reported.
- Fourth-quarter 2026 tax-rate guidance was not reported.
- Prior outlook was not provided, so no comparison of actual results with prior guidance is available.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.