What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-06 compared with 2026-05-07 · 304 added, 189 removed, 281 unchanged (64% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

March 31, 2026

December 31, 2025

(In thousands) June 30, 2026 December 31, 2025

Current assets:

2 unchanged sentences

Accounts receivable, net 26,778 18,254

Inventories 157,790 166,887

Prepaid expenses and other current assets 23,983 23,678

2 unchanged sentences

Intangible assets, net 6,893 7,244

Goodwill 95,271 95,271

Other non-current assets 63,535 64,827

TOTAL ASSETS $ 779,006 $ 772,207

LIABILITIES AND STOCKHOLDERS’ EQUITY

9 unchanged sentences

Common stock, $ 0.001 par value, 140,000 shares authorized;

and 55,600 and 55,339 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

and 55,783 and 55,339 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital 20,230 —

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In thousands, except per share amounts) 2026 2025 2026 2025

Net revenue $ 118,939 $ 115,852 $ 227,247 $ 221,381

Cost of revenue 54,302 51,898 105,672 99,192

Gross profit 64,637 63,954 121,575 122,189

Operating expenses:

1 unchanged sentence

Selling, general and administrative 28,052 30,157 52,496 57,579

Other operating expenses

Other operating expenses (income) 522 9,151 ( 897 ) 9,151

Restructuring and related charges — — 6,204 —

Total operating expenses 55,737 65,299 111,221 116,816

Income from operations

Income (loss) from operations 8,900 ( 1,345 ) 10,354 5,373

Other income 2,333 2,690 4,799 5,857

Income before income taxes 11,233 1,345 15,153 11,230

Provision for income taxes

Provision for (benefit from) income taxes 1,400 ( 24 ) 2,020 1,071

NET INCOME $ 9,833 $ 1,369 $ 13,133 $ 10,159

Earnings per share:

Basic $ 0.18 $ 0.02 $ 0.24 $ 0.18

Diluted $ 0.17 $ 0.02 $ 0.23 $ 0.18

Shares used in per share calculation:

Basic 55,748 56,274 55,627 56,571

Diluted 56,696 56,387 56,335 56,787

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In thousands) 2026 2025 2026 2025

Net income $ 9,833 $ 1,369 $ 13,133 $ 10,159

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments, net of $ 0 tax in each of the three months ended March 31, 2026 and 2025

Unrealized gain (loss) on investments, net of ($ 250 ) and ($ 116 ) tax in the three months ended March 31, 2026 and 2025, respectively

Amortization of defined benefit pension items, net of tax of $ 0 in each of the three months ended March 31, 2026 and 2025

Total other comprehensive income (loss)

Foreign currency translation adjustments, net of $ 0 tax in each of the three and six months ended June 30, 2026 and 2025

69 657 ( 320 ) 1,047

Unrealized gain (loss) on investments, net of $ 0 and ($ 250 ) taxes in the three and six months ended June 30, 2026, respectively, and ($ 49 ) and ($ 166 ) taxes in the three and six months ended June 30, 2025, respectively

( 527 ) 238 ( 1,526 ) 689

Amortization of defined benefit pension items, net of $ 0 taxes in each of the three and six months ended June 30, 2026, respectively, and $ 4 tax in each of the three and six months ended June 30, 2025

Total other comprehensive income (loss), net of tax ( 457 ) 896 ( 1,843 ) 1,736

TOTAL COMPREHENSIVE INCOME $ 9,376 $ 2,265 $ 11,290 $ 11,895

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Total

Stockholders’

(In thousands)

BALANCE AT DECEMBER 31, 2025

(In thousands) Shares Amount

BALANCE AT MARCH 31, 2026 55,600 $ 20 $ 8,997 $ ( 2,491 ) $ 665,280 $ 671,806

Issuance of common stock under employee stock option and stock award plans 183 — — — — —

Issuance of common stock under employee stock purchase plan

Stock-based compensation expense related to employee stock awards — — 10,763 — — 10,763

4 unchanged sentences

Foreign currency translation adjustment — — — 69 — 69

Net income — — — — 9,833 9,833

BALANCE AT JUNE 30, 2026 55,783 $ 20 $ 20,230 $ ( 2,948 ) $ 663,226 $ 680,528

Three Months Ended June 30, 2025

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Total

Stockholders’

(In thousands) Shares Amount

BALANCE AT MARCH 31, 2025 56,692 $ 22 $ 7,106 $ ( 2,183 ) $ 730,870 $ 735,815

Three Months Ended March 31, 2025

Issuance of common stock under employee stock option and stock award plans 171 — — — — —

Repurchase of common stock ( 705 ) ( 1 ) ( 17,183 ) — ( 15,376 ) ( 32,560 )

Stock-based compensation expense related to employee stock awards — — 9,623 — — 9,623

Stock-based compensation expense related to employee stock purchases — — 454 — — 454

Payment of dividends to stockholders — — — — ( 11,809 ) ( 11,809 )

Unrealized actuarial gain on pension benefits — — — 1 — 1

Unrealized gain on investments — — — 238 — 238

Foreign currency translation adjustment — — — 657 — 657

Net income — — — — 1,369 1,369

BALANCE AT JUNE 30, 2025 56,158 $ 21 $ — $ ( 1,287 ) $ 705,054 $ 703,788

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

POWER INTEGRATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Six Months Ended June 30, 2026

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Total

Stockholders’

(In thousands)

(In thousands) Shares Amount

BALANCE AT DECEMBER 31, 2025 55,339 $ 20 $ — $ ( 1,105 ) $ 673,930 $ 672,845

Issuance of common stock under employee stock option and stock award plans 375 — — — — —

Issuance of common stock under employee stock purchase plan 69 — 2,690 — — 2,690

Stock-based compensation expense related to employee stock awards — — 16,680 — — 16,680

Stock-based compensation expense related to employee stock purchases — — 860 — — 860

Payment of dividends to stockholders — — — — ( 23,837 ) ( 23,837 )

Unrealized actuarial gain on pension benefits — — — 3 — 3

Unrealized loss on investments — — — ( 1,526 ) — ( 1,526 )

Foreign currency translation adjustment — — — ( 320 ) — ( 320 )

Net income — — — — 13,133 13,133

BALANCE AT JUNE 30, 2026 55,783 $ 20 $ 20,230 $ ( 2,948 ) $ 663,226 $ 680,528

Six Months Ended June 30, 2025

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Total

Stockholders’

(In thousands) Shares Amount

BALANCE AT DECEMBER 31, 2024 56,837 $ 22 $ 18,734 $ ( 3,023 ) $ 734,039 $ 749,772

Repurchase of common stock ( 1,109 ) ( 1 ) ( 40,281 ) — ( 15,376 ) ( 55,658 )

3 unchanged sentences

Payment of dividends to stockholders — — — — ( 23,768 ) ( 23,768 )

Unrealized actuarial loss on pension benefits

Unrealized gain on investments — — — 689 — 689

Foreign currency translation adjustment — — — 1,047 — 1,047

BALANCE AT MARCH 31, 2025

Net income — — — — 10,159 10,159

BALANCE AT JUNE 30, 2025 56,158 $ 21 $ — $ ( 1,287 ) $ 705,054 $ 703,788

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In thousands) 2026 2025

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 13,133 $ 10,159

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of intangibles

Depreciation 12,619 14,246

Amortization of intangible assets 351 415

Loss on disposal of property and equipment 495 —

1 unchanged sentence

Accretion of discount on investments ( 300 ) ( 721 )

Deferred income taxes 1,758 ( 854 )

Decrease in accounts receivable allowance for credit losses — ( 381 )

1 unchanged sentence

Accounts receivable ( 8,524 ) ( 30 )

Inventories 9,097 ( 2,784 )

Prepaid expenses and other assets 3,925 6,405

11 unchanged sentences

Payments of dividends to stockholders ( 23,837 ) ( 23,768 )

Proceeds from borrowings on line of credit — 13,000

Repayments on line of credit — ( 13,000 )

NET CASH USED IN FINANCING ACTIVITIES ( 21,147 ) ( 76,639 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

NET INCREASE IN CASH AND CASH EQUIVALENTS 11,857 15,963

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 58,755 50,972

15 unchanged sentences

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) which requires additional disclosure of certain costs and expenses, including inventory purchases, employee compensation, selling expense and depreciation expense within the notes to financial statements.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) which requires additional disclosure of certain costs and expenses, including inventory purchases, employee compensation, selling expense, and depreciation expense within the notes to financial statements.

The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

6 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEET COMPONENTS AND OTHER INFORMATION:

Accounts Receivable

(In thousands)

Accounts Receivable, net

(In thousands) June 30,

2026 December 31,

Accounts receivable trade $ 64,028 $ 54,177

2 unchanged sentences

Allowance for credit losses ( 94 ) ( 94 )

(In thousands)

Total $ 26,778 $ 18,254

(In thousands) June 30,

2026 December 31,

Raw materials $ 94,874 $ 101,366

1 unchanged sentence

Finished goods 29,782 37,616

Total $ 157,790 $ 166,887

Other non-current assets

(In thousands)

(In thousands) June 30,

2026 December 31,

Deferred tax assets $ 34,085 $ 35,594

Right of use for leased properties

Right of use lease assets 21,913 19,325

Prepaid expenses 5,438 6,863

Other non-current assets 2,099 3,045

Total $ 63,535 $ 64,827

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive income for the three months ended March 31, 2026 and 2025, were as follows:

Changes in accumulated other comprehensive income (loss) for the three and six months ended June 30, 2026 and 2025, were as follows:

Unrealized Gains

and Losses on

Defined Benefit

Foreign Currency

Pension Items

Three Months Ended

Investments Defined Benefit

Pension Items Foreign Currency

Three Months Ended

June 30, Three Months Ended

(In thousands) 2026 2025 2026 2025 2026 2025 2026 2025

4 unchanged sentences

Ending balance $ 225 $ 1,382 $ ( 29 ) $ 99 $ ( 3,144 ) $ ( 2,768 ) $ ( 2,948 ) $ ( 1,287 )

(1) This component of accumulated other comprehensive income is included in the computation of net periodic pension cost for the three months ended March 31, 2026 and 2025.

_____________________________________

(1) This component of accumulated other comprehensive income is included in the computation of net periodic pension cost for the three months ended June 30, 2026 and 2025.

Unrealized Gains

and Losses on

Investments Defined Benefit

Pension Items Foreign Currency

Six Months Ended

June 30, Six Months Ended

(In thousands) 2026 2025 2026 2025 2026 2025 2026 2025

Beginning balance $ 1,751 $ 693 $ ( 32 ) $ 99 $ ( 2,824 ) $ ( 3,815 ) $ ( 1,105 ) $ ( 3,023 )

Other comprehensive income (loss) before reclassifications ( 1,526 ) 689 — — ( 320 ) 1,047 ( 1,846 ) 1,736

Amounts reclassified from accumulated other comprehensive income (loss) — — 3 (1)

Net-current period other comprehensive income (loss) ( 1,526 ) 689 3 — ( 320 ) 1,047 ( 1,843 ) 1,736

Ending balance $ 225 $ 1,382 $ ( 29 ) $ 99 $ ( 3,144 ) $ ( 2,768 ) $ ( 2,948 ) $ ( 1,287 )

_____________________________________

(1) This component of accumulated other comprehensive income is included in the computation of net periodic pension cost for the six months ended June 30, 2026 and 2025.

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

RESTRUCTURING:

The Company continuously evaluates its operations to better align the organization with market opportunities, increase operational efficiency, decrease costs and increase profitability.

During the three months ended March 31, 2026, the Company undertook a restructuring plan, reducing its workforce by approximately 7 % to better align expenses with revenue and create flexibility to invest in the products, people, and markets that are expected to drive long-term growth and profitability.

In conjunction with this restructuring plan, restructuring charges of $ 6.6 million were recognized during the first quarter of 2026, primarily composed of severance costs.

The restructuring plan was substantially completed in the first quarter of 2026.

No restructuring charges were incurred in fiscal 2025.

Restructuring liabilities are included in other accrued liabilities in the accompanying unaudited condensed consolidated balance sheets, and are summarized in the following table:

Customer Concentration

The Company’s top ten customers accounted for approximately 82 % and 81 % of net revenue in the three and six months ended June 30, 2026 and approximately 81 % in both of the corresponding periods of 2025.

A significant portion of revenue is attributable to sales of the Company’s products to distributors of electronic components.

These distributors sell the Company’s products to a broad, diverse range of end users, including original equipment manufacturers (“OEMs”) and merchant power-supply contract manufacturers (“CMs”).

Similarly, merchant power-supply manufacturers sell power supplies incorporating the Company’s products to a broad range of OEMs.

Sales to distributors and direct sales to OEMs and power-supply CMs contributed to the Company’s net revenue as follows:

Three Months Ended

June 30, Six Months Ended

(In thousands) 2026 2025 2026 2025

Employee severance

Restructuring liability as of January 1, 2026

Cash payments

Non-cash and other

Restructuring liability as of March 31, 2026

Cash severance charges of $ 0.4 million related to the departure of an executive officer are included in the table hereto.

In addition, stock-based compensation expense of $ 1.8 million was recognized in the three months ended March 31, 2026 due to the acceleration of equity awards in accordance with the terms of the executive’s severance agreement.

The following table provides a summary of restructuring-related charges as presented in the unaudited condensed consolidated statements of income:

Sales to distributors $ 86,103 $ 81,298 $ 162,842 $ 156,462

Sales to OEMs and CMs 32,836 34,554 64,405 64,919

Total net revenue $ 118,939 $ 115,852 $ 227,247 $ 221,381

During the three and six months ended June 30, 2026 and 2025, approximately 16 % of net revenue in each period presented related to an OEM fulfilling its purchases through the Company’s CM customers.

The following customers represented 10% or more of the Company’s net revenue for the respective periods:

Three Months Ended

June 30, Six Months Ended

Customer 2026 2025 2026 2025

Customer A 33 % 33 % 31 % 32 %

Customer B 11 % * 10 % *

Customer C 11 % 11 % 10 % *

_____________________________________

* Total customer revenue was less than 10% of net revenue.

No other customers accounted for 10% or more of the Company’s net revenue in the periods presented.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and trade receivables.

The Company does not have any off-balance-sheet credit exposure related to its customers.

As of June 30, 2026 and December 31, 2025, 90 % and 89 % of accounts receivable were concentrated in the Company’s top ten customers.

The following customers represented 10% or more of accounts receivable at June 30, 2026 and December 31, 2025:

Customer June 30,

2026 December 31,

Customer A 38 % 32 %

Customer B * *

Customer C 13 % 18 %

Customer D 11 % 11 %

_____________________________________

* Total customer accounts receivable was less than 10% of accounts receivable.

No other customers accounted for 10% or more of the Company’s accounts receivable in the periods presented.

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net Revenue by Geography

The Company markets its products globally through its sales personnel and a worldwide network of independent sales representatives and distributors.

Net revenue by region and country with 10% or more of the Company’s revenue during any of the periods presented, based on “bill to” customer locations were as follows:

Three Months Ended

June 30, Six Months Ended

(In thousands) 2026 2025 2026 2025

Restructuring and related charges in cost of revenue

Restructuring and related charges in operating expenses

In conjunction with the restructuring actions, certain engineers were moved from sales and marketing projects to product development priorities.

In accordance with this, $ 3.0 million of related department costs have been classified as research and development expense in the accompanying condensed consolidated statement of income this quarter and will be accounted for accordingly going forward .

Americas $ 4,659 $ 5,850 $ 11,742 $ 11,567

EMEA 17,430 12,756 32,555 24,047

Hong Kong/China 53,179 67,691 103,150 124,179

Singapore 15,917 3,979 22,018 6,642

Other APAC 27,754 25,576 57,782 54,946

Total net revenue $ 118,939 $ 115,852 $ 227,247 $ 221,381

FAIR VALUE MEASUREMENTS:

5 unchanged sentences

The Company’s cash equivalents and short-term investments are classified within Level 1 or Level 2 of the fair-value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair-value hierarchy of the Company’s cash equivalents and short-term investments at March 31, 2026 and December 31, 2025, was as follows:

The fair-value hierarchy of the Company’s cash equivalents and short-term investments at June 30, 2026 and December 31, 2025, was as follows:

Fair Value Measurement at

March 31, 2026

Quoted Prices in

June 30, 2026

(In thousands) Total Fair Value Quoted Prices in

Active Markets for

Significant Other

Identical Assets

(Level 1) Significant Other

Observable Inputs

(In thousands)

Total Fair Value

Commercial paper $ 8,438 $ — $ 8,438

1 unchanged sentence

Money market funds 593 593 —

government securities 1,250 — 1,250

Total $ 202,282 $ 593 $ 201,689

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value Measurement at

December 31, 2025

Quoted Prices in

(In thousands) Total Fair Value Quoted Prices in

Active Markets for

Significant Other

Identical Assets

(Level 1) Significant Other

Observable Inputs

(In thousands)

Total Fair Value

Commercial paper $ 5,555 $ — $ 5,555

2 unchanged sentences

government securities 999 — 999

The Company did not transfer any investments between Level 1 and Level 2 of the fair-value hierarchy in the three months ended March 31, 2026 and the twelve months ended December 31, 2025.

Amortized cost and estimated fair market value of investments classified as available-for-sale (excluding cash equivalents) at March 31, 2026, were as follows:

Gross Unrealized

Estimated Fair

(In thousands)

Total $ 199,371 $ 3,559 $ 195,812

The Company did not transfer any investments between Level 1 and Level 2 of the fair-value hierarchy in the three and six months ended June 30, 2026 and the twelve months ended December 31, 2025.

Amortized cost and estimated fair market value of investments classified as available-for-sale (excluding cash equivalents) at June 30, 2026, were as follows:

Cost Gross Unrealized Estimated Fair

(In thousands) Gains Losses

Investments due in 3 months or less:

Commercial paper

Corporate securities $ 10,656 $ 15 $ — $ 10,671

Total 10,656 15 — 10,671

Investments due in 4-12 months:

Corporate securities 87,107 371 ( 2 ) 87,476

Total 87,107 371 ( 2 ) 87,476

Investments due in 12 months or greater:

Corporate securities 94,075 106 ( 327 ) 93,854

Total 94,075 106 ( 327 ) 93,854

Total investments $ 191,838 $ 492 $ ( 329 ) $ 192,001

Accrued interest receivable was $ 1.8 million at March 31, 2026, and was recorded within prepaid expenses and other current assets on the condensed consolidated balance sheet.

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accrued interest receivable was $ 2.3 million at June 30, 2026, and was recorded within prepaid expenses and other current assets on the condensed consolidated balance sheet.

Amortized cost and estimated fair market value of investments classified as available-for-sale (excluding cash equivalents) at December 31, 2025, were as follows:

Gross Unrealized

Estimated Fair

(In thousands)

Cost Gross Unrealized Estimated Fair

(In thousands) Gains Losses

Investments due in 3 months or less:

1 unchanged sentence

Corporate securities 8,152 8 — 8,160

Total 9,650 8 — 9,658

Investments due in 4-12 months:

Corporate securities 32,256 267 — 32,523

Total 32,256 267 — 32,523

Investments due in 12 months or greater:

Corporate securities 146,910 1,665 ( 1 ) 148,574

Total 146,910 1,665 ( 1 ) 148,574

Total investments $ 188,816 $ 1,940 $ ( 1 ) $ 190,755

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accrued interest receivable was $ 2.3 million at December 31, 2025, and was recorded within prepaid expenses and other current assets on the condensed consolidated balance sheet.

The following table summarizes investments classified as available-for-sale (excluding cash equivalents) in a continuous unrealized loss position for which an allowance for credit losses was not recorded at March 31, 2026:

Less Than 12 Months

12 Months or Longer

(In thousands)

Less Than 12 Months 12 Months or Longer Total

(In thousands) Estimated

Losses Estimated

Corporate securities $ 52,066 $ ( 329 ) $ — $ — $ 52,066 $ ( 329 )

Total investments $ 52,066 $ ( 329 ) $ — $ — $ 52,066 $ ( 329 )

In the three months ended March 31, 2026 and 2025, no unrealized losses on investments were recognized in the condensed consolidated statements of income.

In the three and six months ended June 30, 2026 and 2025, no unrealized losses on investments were recognized in the condensed consolidated statements of income.

The Company does not intend to sell, and it is unlikely that it will be required to sell the securities held prior to their anticipated recovery.

1 unchanged sentence

Additionally, the issuers continue to make timely interest payments on the investments with the fair value expected to recover as they reach maturity.

BANK LINES OF CREDIT:

In 2016, the Company entered into a credit agreement with Wells Fargo Bank, National Association (the "Prior Credit Agreement") that provided the Company with a $ 75.0 million revolving line of credit to use for general corporate purposes and a $ 20.0 million sub-limit for the issuance of standby and trade letters of credit with an interest rate based on the Secured Overnight Financing Rates (“SOFR”).

The Prior Credit Agreement had a term which originally extended to June 7, 2026, but was terminated by the Company on April 10, 2026.

The Company was compliant with all covenants and had no advances outstanding under the Prior Credit Agreement at termination.

On February 24, 2026, the Company entered into a new unsecured loan agreement with PNC Bank, National Association (the "PNC Loan Agreement"), in part, to replace the Prior Credit Agreement.

The PNC Loan Agreement became effective and available for use on April 10, 2026 when the Company terminated the Prior Credit Agreement.

The PNC Loan Agreement provides the Company with a $ 100.0 million revolving line of credit with a $ 25.0 million sub-limit for the issuance of standby and trade letters of credit.

The interest rate on outstanding borrowings under the PNC Loan Agreement is based on SOFR plus 1.60 %.

The PNC Loan Agreement term extends through February 24, 2031.

All advances under the PNC Loan Agreement, together with all accrued and unpaid interest, fees, and other obligations owing thereon, will become due and payable on such date, or earlier upon the occurrence of an Event of Default as defined in the PNC Loan Agreement.

The PNC Loan Agreement requires the Company to maintain a Minimum Liquidity of at least $ 50.0 million as of the last day of each fiscal quarter and a ratio of Funded Indebtedness to Adjusted EBITDA, each as defined in the PNC Loan Agreement, of less than 2.00 to 1.00 as of the last day of each fiscal quarter and determined on a rolling four-quarter basis.

The PNC Loan Agreement contains representations and warranties, affirmative covenants, and conditions precedent to borrowings that are usual and customary for credit agreements of this type.

The PNC Loan Agreement contains certain limited covenants that restrict, subject to certain exceptions, the Company’s ability to incur additional indebtedness or liens, issue guarantees or become liable for obligations of other persons or entities, liquidate, dissolve, merge, or consolidate with any other entity, or convey, transfer, or lease the Company's properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions.

The Company was compliant with all covenants and had no advances outstanding under the PNC Loan Agreement as of June 30, 2026.

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

STOCKHOLDERS’ EQUITY:

1 unchanged sentence

In October 2024, the Company’s board of directors declared dividends of $ 0.21 per share to be paid to stockholders of record at the end of each quarter in 2025.

In October 2025, the Company’s board of directors raised the quarterly cash dividend with the declaration of four cash dividends of $ 0.215 per share to be paid at the end of each quarter in 2026.

For the three months ended March 31, 2026 and 2025, cash dividends declared and paid were as follows:

In October 2025, the Company’s board of directors raised the quarterly cash dividend and declared cash dividends of $ 0.215 per share to be paid at the end of each quarter in 2026.

For the three and six months ended June 30, 2026 and 2025, cash dividends declared and paid were as follows:

Three Months Ended

June 30, Six Months Ended

(In thousands, except per share amounts) 2026 2025 2026 2025

1 unchanged sentence

Dividends declared per common share $ 0.215 $ 0.21 $ 0.430 $ 0.42

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Common Stock Repurchases

From time to time, the Company’s board of directors has authorized the use of funds to repurchase shares of the Company’s common stock.

As of December 31, 2025, the Company did no t have any amount authorized to repurchase shares of its common stock.

As of June 30, 2026 , the Company did no t have any amount authorized to repurchase shares of its common stock.

Employee Stock Incentive Plans

The following table summarizes the stock-based compensation expense recognized in accordance with ASC 718-10 for the three months ended March 31, 2026 and 2025:

The following table summarizes the stock-based compensation expense recognized in accordance with ASC 718 for the three and six months ended June 30, 2026 and 2025:

Three Months Ended

June 30, Six Months Ended

(In thousands) 2026 2025 2026 2025

13 unchanged sentences

Consequently, in the year ended December 31, 2025, the Company recognized stock-based compensation in the amount of $ 8.4 million in other operating expenses.

In the quarter ended March 31, 2026, the Company recorded a $ 1.4 million credit in other operating expenses on the condensed consolidated statements of income, reversing a portion of the previously recognized stock-based compensation expense.

The reversal reflects our revised estimate of the portion of the awards that will ultimately vest.

In the three months ended June 30, 2026, the Company recorded an expense of $ 0.5 million in other operating expenses on its condensed consolidated statements of income, adjusting a portion of the previously recognized stock-based compensation expenses.

The corresponding amount for the six-month period was a credit of $ 0.9 million.

The adjustment reflects our revised estimate of the portion of the awards that will ultimately vest based on the Company's forecasted performance.

Subsequent changes in our estimates could result in further adjustments in future periods until the vesting of these equity awards.

Customer Concentration

The Company’s top ten customers accounted for approximately 80 % of net revenue in both the three months ended March 31, 2026 and 2025.

A significant portion of revenue is attributable to sales of the Company’s products to distributors of electronic components.

Similarly, merchant power-supply manufacturers sell power supplies incorporating the Company’s products to a broad range of OEMs.

Sales to distributors and direct sales to OEMs and power-supply CMs contributed to the Company’s net revenue as follows:

Three Months Ended

(In thousands)

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Sales to distributors

Sales to OEMs and CMs

Total net revenue

During the three months ended March 31, 2026 and 2025, 15 % and 13 % of net revenue related to an OEM that fulfilled its purchases through the Company’s CM customers in each respective quarter.

The following customers represented 10% or more of the Company’s net revenue for the respective periods:

Three Months Ended

* Total customer revenue was less than 10% of net revenue.

No other customers accounted for 10% or more of the Company’s net revenue in the periods presented.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash investments and trade receivables.

The Company does not have any off-balance-sheet credit exposure related to its customers.

As of March 31, 2026 and December 31, 2025, 87 % and 89 % of accounts receivable were concentrated with the Company’s top ten customers.

The following customers represented 10% or more of accounts receivable at March 31, 2026 and December 31, 2025:

* Total customer accounts receivable was less than 10% of accounts receivable.

No other customers accounted for 10% or more of the Company’s accounts receivable in the periods presented.

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net Revenue by Geography

The Company markets its products globally through its sales personnel and a worldwide network of independent sales representatives and distributors.

Net revenue by region and country with 10% or more of the Company’s revenue during any of the periods presented, based on “bill to” customer locations were as follows:

Three Months Ended

(In thousands)

Hong Kong/China

Total net revenue

EARNINGS PER SHARE:

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In thousands, except per share amounts) 2026 2025 2026 2025

Basic earnings per share:

Net income $ 9,833 $ 1,369 $ 13,133 $ 10,159

Weighted-average common shares 55,748 56,274 55,627 56,571

1 unchanged sentence

Diluted earnings per share:

Net income $ 9,833 $ 1,369 $ 13,133 $ 10,159

Weighted-average common shares 55,748 56,274 55,627 56,571

3 unchanged sentences

Diluted earnings per share $ 0.17 $ 0.02 $ 0.23 $ 0.18

_____________________________________

(1) The Company includes the shares underlying performance-based awards in the calculation of diluted earnings per share if the performance conditions have been satisfied as of the end of the reporting period and excludes such shares when the necessary conditions have not been met.

3 unchanged sentences

Accordingly, the interim effective tax rate may not be reflective of the annual estimated effective tax rate.

The Company’s effective tax rate for the three and six months ended June 30, 2026, was 12.5 % and 13.3 %, respectively, and ( 1.8 %) and 9.5 % in the corresponding period of 2025.

The effective tax rate in these periods were lower than the statutory federal income tax rate of 21% due to the geographic distribution of the Company’s worldwide earnings in lower tax jurisdictions and federal tax credits.

For the three months ended June 30, 2026, our effective tax rate benefited from a tax accounting windfall related to share-based payments.

For the six months ended June 30, 2026, our effective tax rate was adversely affected by a tax accounting shortfall related to share-based payments.

Additionally, i n the three and six months ended June 30, 2025 , the Company’s effective tax rate was unfavorably affected by the recognition of share-based payments and foreign income subject to U.S.

The Company has not been granted any incentivized tax rates and does not operate under any tax holidays in any jurisdiction .

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s effective tax rate for the three months ended March 31, 2026, was 15.8 % and 11.1 % in the corresponding period of 2025.

The effective tax rate in these periods were lower than the statutory federal income-tax rate of 21 % due to the geographic distribution of the Company’s world-wide earnings in lower-tax jurisdictions and federal tax credits.

In the three months ended March 31, 2026, the Company’s effective tax rate was affected by the recognition of a tax accounting shortfall associated with share-based payments.

Additionally, i n the three months ended March 31, 2025, the Company’s effective tax rate was unfavorably impacted by the recognition of share-based payments and foreign income subject to U.S.

The Company has not been granted any incentivized tax rates and does not operate under any tax holidays in any jurisdiction .

COMMITMENTS AND CONTINGENCIES:

Supplier Agreements

Under the terms of the Company’s wafer-supply agreements with various foundries, the wafers purchased from these suppliers are priced in U.S.

dollars, with mutual sharing of the impact of fluctuations in the exchange rate between the Japanese yen and the U.S.

dollar on future purchases.

Each year, the Company’s management and several suppliers review and negotiate future pricing;

the negotiated pricing is denominated in U.S.

dollars but is subject to contractual exchange-rate true-up provisions.

The fluctuation in the exchange rate is shared between the Company and each of these suppliers on future purchases.

The Company generally warrants that its products will substantially conform to the published specifications for 12 months from the date of shipment.

Under the terms and conditions of sale, the Company’s liability is limited generally to either a credit equal to the purchase price or replacement of the part.

Under the terms of the Company’s wafer supply agreements with various foundries located in Japan, the parties periodically review and negotiate pricing;

the wafer purchases thereunder are denominated in U.S.

To mitigate the impact of future fluctuations in the exchange rate between the Japanese yen and the U.S.

dollar, these agreements contain provisions for the parties to share in that risk.

The Company generally warrants that its products will substantially conform to its published specifications for 12 months from the date of shipment.

Under the terms and conditions of sale, the Company’s liability is generally limited to either a credit equal to the purchase price or replacement of the part.

Legal Proceedings

1 unchanged sentence

In accordance with ASC 450-10, Contingencies , the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

During the year ended December 31, 2025, the Company had been defending against patent-infringement claims filed by a third party against a customer of the Company, including claims filed in 2019 and a follow-on claim filed in the first quarter of 2025.

The Company intervened on behalf of its customer and sought a declaration of non-infringement with respect to use of the Company’s products.

In the second half of 2025, the Company successfully obtained verdicts of noninfringement and invalidity of all asserted claims, and as part of the noninfringement verdict, the jury found that no products incorporating the Company’s specified products met the specific requirements of the claimant’s asserted claims.

The Court thereafter entered judgment in favor of the Company and also dismissed the follow-on claim.

In April 2026, the Company executed a settlement in which the claimant granted the Company a full release and covenant not to assert any claims against the Company or its customers on any of the claimant’s patents based on the use or incorporation of any product.

In 2019, a third party caused a patent infringement matter to be filed against a customer of the Company related to that customer's use of Company products.

The third party also caused a follow-on claim to be filed against the same customer in the first quarter of 2025.

The Company intervened on behalf of the customer and sought a declaration of non-infringement with respect to the customer's use of the Company’s products.

In the second half of 2025, the Company obtained a verdict of non-infringement and invalidity as to all claims asserted against the customer.

The third party appealed the judgment.

In April 2026, during the pendency of the appeal, the Company entered into an agreement with the third party which resolved all matters between the parties, including a dismissal of the appeal and granted to the Company a full release and covenant by the third party not to assert any claims against the Company or its customers based on any of the third party's patents, including those upon which the original lawsuit was based.

The Company did not provide any payment to the claimant in exchange for the resolution of the dispute.

Pursuant to the settlement, all pending motions in the case have been terminated and the matter is now closed.

As of December 31, 2025, the Company had reserved approximately $ 11.3 million for an employee relations dispute including legal fees which is pending ongoing court proceedings.

While the court ruled in favor of the plaintiff in the second quarter of 2025, the Company disagrees with the jury’s verdict and court’s orders related to plaintiff attorney fees and related costs against the Company and has appealed the judgement.

The charges associated with the established reserve were recognized in other operating expenses in the accompanying condensed consolidated statements of income.

The Company is unable to predict the outcome of any further proceedings with certainty, and there can be no assurance that the Company will prevail in the hereto-mentioned litigation.

The Company evaluates, at least on a quarterly

In 2021, the Company was named in a wrongful termination lawsuit by a former employee.

The matter went to trial in 2025 and resulted in a jury verdict adverse to the Company of approximately $ 11.3 million;

the Company reserved this amount.

The Company disagrees with the jury’s verdict and has appealed the judgment.

The charges associated with the established reserve were recognized in other operating expenses in the accompanying condensed consolidated statements of income as of December 31, 2025.

The Company is unable to predict the outcome of any legal proceedings with certainty, and there can be no assurance that the Company will prevail in any litigation or dispute.

The Company evaluates, at least quarterly, developments in its legal matters that could affect the amount of any accrual, as well as any developments that would result in a loss contingency becoming both probable and reasonably estimable.

These litigation matters, whether or not ultimately determined in the Company’s favor or settled, will be costly and will divert the efforts and attention of the Company’s management and technical personnel from normal business operations, potentially causing a material adverse effect on the business, financial condition, and operating results.

In addition, adverse determinations in any patent litigation matter could result in the loss of proprietary rights, subject the Company to significant liabilities, require the Company to seek licenses from third parties or prevent the Company from licensing its technology, and incur monetary losses, any of which could have a material adverse effect on the Company’s business, financial condition, and operating results.

Indemnifications

The Company sells products to its distributors under agreements that generally include provisions for indemnification of the distributor against losses, expenses, and damages that may be awarded in the event the Company’s products are found to infringe upon a patent, copyright, trademark, or other proprietary right of a third party.

The agreements generally limit the scope of and remedies for these obligations, including, but not limited to, limitations based on time and geography, and a right to replace an infringing product.

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

basis, developments in its legal matters that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable.

These litigations, whether or not determined in the Company’s favor or settled, will be costly and will divert the efforts and attention of the Company’s management and technical personnel from normal business operations, potentially causing a material adverse effect on the business, financial condition and operating results.

In addition, adverse determinations in patent litigation could result in the loss of proprietary rights, subject the Company to significant liabilities, require the Company to seek licenses from third parties or prevent the Company from licensing the technology, and incur monetary losses, any of which could have a material adverse effect on the Company’s business, financial condition and operating results.

Indemnifications

The Company sells products to its distributors under contracts, collectively referred to as Distributor Sales Agreements (“DSA”).

Each DSA contains the relevant terms of the contractual arrangement with the distributor, and generally includes certain provisions for indemnifying the distributor against losses, expenses, and liabilities from damages that may be awarded against the distributor in the event the Company’s products are found to infringe upon a patent, copyright, trademark, or other proprietary right of a third party (“Customer Indemnification”).

The DSA generally limits the scope of and remedies for the Customer Indemnification obligations in a variety of industry-standard respects, including, but not limited to, limitations based on time and geography, and a right to replace an infringing product.

The Company also, from time to time, has granted a specific indemnification right to individual customers.

The Company believes its internal development processes and other policies and practices limit its exposure related to such indemnifications.

In addition, the Company requires its employees to sign a proprietary information and inventions agreement, which assigns the rights to its employees’ development work to the Company.

While the Company has on occasion been made aware of claims against its distributors or customers that may trigger an indemnification claim, to date, the Company has not had to reimburse any of its distributors or customers for any losses related to these indemnifications and no material claims were outstanding as of March 31, 2026.

For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases, the Company cannot determine the maximum amount of potential future payments, if any, related to such indemnifications.

While the Company has on occasion been made aware of claims against its distributors or customers that may trigger an indemnification claim, to date, the Company has not had to reimburse any of its distributors or customers for any material losses related to these indemnification obligations and no material claims were outstanding as of June 30, 2026.

SEGMENT REPORTING:

1 unchanged sentence

the design, development, manufacture, and marketing of integrated circuits and related components for use primarily in high-voltage power conversion.

This determination is based on the management approach which designates internal information regularly available to the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as the source of determination of the Company’s reportable segments.

This determination is based on the management approach which designates the internal information regularly available to the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as the source of determination of the Company’s reportable segment.

The Company’s CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis for the purpose of making operating decisions and assessing financial performance.

1 unchanged sentence

The CODM regularly reviews net income as reported on the Company’s consolidated statements of income.

Financial forecasts and budget to actual results used by the CODM to assess performance and allocate resources, as well as those used for strategic decisions related to headcount and capital expenditures, are also reviewed on a consolidated basis.

Financial forecasts and comparisons of budget to actual results are used by the CODM to assess performance and allocate resources.

In addition, these forecasts and comparisons are used for strategic decisions related to making headcount and capital expenditure decisions, all of which are reviewed on a consolidated basis.

The CODM considers the impact on net income of the significant segment expenses in the table below when deciding whether to reinvest profits, propose dividends or share repurchase, or pursue strategic mergers and acquisitions.

1 unchanged sentence

The CODM does not review segment assets at a level other than that presented in the Company’s consolidated balance sheets.

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The table below presents the Company’s consolidated operating results including significant segment expenses:

Three Months Ended

June 30, Six Months Ended

(In thousands) 2026 2025 2026 2025

Net revenue $ 118,939 $ 115,852 $ 227,247 $ 221,381

Stock-based compensation (1) 11,258 10,077 17,565 18,760

5 unchanged sentences

Restructuring and related charges in operating expenses (excluding 1) — — 4,377 —

Income from operations

Provision for income taxes

Income (loss) from operations 8,900 ( 1,345 ) 10,354 5,373

Other income 2,333 2,690 4,799 5,857

Provision for (benefit from) income taxes 1,400 ( 24 ) 2,020 1,071

Net income $ 9,833 $ 1,369 $ 13,133 $ 10,159

POWER INTEGRATIONS, INC.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In thousands) 2026 2025 2026 2025

Amortization of intangibles

Depreciation $ 6,239 $ 7,002 $ 12,619 $ 14,246

Amortization of intangible assets $ 168 $ 208 $ 351 $ 415

Interest income $ 2,527 $ 3,035 $ 5,051 $ 6,395

BANK LINES OF CREDIT

The Prior Credit Agreement had a term which originally extended to June 7, 2026;

the Prior Credit Agreement was terminated on April 10, 2026.

The Company was compliant with all covenants and had no advances outstanding under the Prior Credit Agreement as of termination of the Prior Credit Agreement.

On February 24, 2026, the Company entered into that certain Loan Agreement with PNC Bank, National Association (the "PNC Loan Agreement") to replace the Prior Credit Agreement.

The PNC Loan Agreement became effective and available for use on April 10, 2026 when the Company terminated the Prior Credit Agreement.

The PNC Loan Agreement provides the Company with a $ 100.0 million revolving line of credit with a $ 25.0 million sub-limit for the issuance of standby and trade letters of credit.

The interest rate on outstanding borrowings under the PNC Loan Agreement is based on SOFR plus 1.60 %.

The Company’s obligations under the PNC Loan Agreement are unsecured.

The PNC Loan Agreement term extends through February 24, 2031;

all advances under the revolving line of credit, together with all accrued and unpaid interest, fees and other obligations owing thereon, will become due on such date, or earlier upon the occurrence of an Event of Default (as defined in the PNC Loan Agreement).

The PNC Loan Agreement requires the Company to maintain a Minimum Liquidity of at least $ 50.0 million as of the last day of each fiscal quarter and a ratio of Funded Indebtedness to Adjusted EBITDA (each as defined in the PNC Loan Agreement) of less than 2.00 to 1.00 as of the last day of each fiscal quarter and determined on a rolling four-quarter basis.

The PNC Loan Agreement contains representations and warranties, affirmative covenants and conditions precedent to borrowing usual and customary for credit agreements of this type.

The PNC Loan Agreement contains negative covenants, including negative covenants that restrict, subject to certain exceptions, the Company’s ability to:

● use the proceeds of any credit extended under the PNC Loan Agreement except to refinance all indebtedness outstanding under the Prior Credit Agreement and for working capital or other general business purposes;

● create, incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, loans or advances;

● mortgage, pledge, grant or permit to exist a security interest in, or lien upon, all or any portion of the Company’s assets;

● guarantee or become liable for any obligations or liabilities of any other person or entity;

● purchase or hold beneficially any stock, or other securities or evidence of indebtedness of, or make or have outstanding, any loans or advances to, or otherwise extend credit to, or make any investment or acquire any interest whatsoever in, any other person, firm, corporation or other entity;

● liquidate, dissolve, merge or consolidate with or into any person, firm, corporation or other entity, or make acquisitions of all or substantially all of the property or assets of any person, firm, corporation or other entity, or sell, lease, transfer or otherwise dispose of all or a substantial part of the Company’s property, assets, operations or business.

The Company was compliant with all covenants and had no advances outstanding under the PNC Loan Agreement as of April 10, 2026.

RESTRUCTURING:

The Company continuously evaluates its operations to better align the organization with market opportunities, increase operational efficiency, decrease costs, and increase profitability.

In conjunction with this restructuring plan, restructuring charges of $ 6.6 million were recognized during the first quarter of 2026, primarily composed of severance costs.

The restructuring plan was substantially completed in the first quarter of 2026.

No restructuring charges were incurred in fiscal 2025.

Restructuring liabilities are included in other accrued liabilities in the accompanying unaudited condensed consolidated balance sheets, and are summarized in the following table:

(in thousands) Employee severance Other Total

Restructuring liability as of January 1, 2026 $ — $ — $ —

Charges 4,591 151 4,742

Cash payments ( 4,388 ) ( 151 ) ( 4,539 )

Non-cash and other — — —

Restructuring liability as of June 30, 2026 $ 203 $ — $ 203

Cash severance charges of $ 0.4 million related to the departure of an executive officer are included in the table above.

In addition, stock-based compensation expense of $ 1.8 million was recognized in the six months ended June 30, 2026 due to the acceleration of equity awards in accordance with the terms of the executive’s severance agreement.

The following table provides a summary of restructuring-related charges as presented in the unaudited condensed consolidated statements of income:

Three Months Ended

June 30, Six Months Ended

(in thousands) 2026 2025 2026 2025

Restructuring and related charges in cost of revenue $ — $ — $ 365 $ —

Restructuring and related charges in operating expenses — — 6,204 —

$ — $ — $ 6,569 $ —

In conjunction with the restructuring actions taken in the first quarter of 2026, certain engineers were moved from sales and marketing projects to product development priorities.

Accordingly, $ 3.0 million of related department costs have been classified as research and development expense in the accompanying condensed consolidated statement of income for the first quarter ended March 31, 2026 and will be accounted for as such going forward .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements