Power Integrations, Inc.

Hello, everyone. Thank you for joining us and welcome to the Power Integrations Q1 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Joe Schiffler, Senior Director of Investor Relations. Please go ahead.

Thanks, Alexandra. Good afternoon. Thanks, everyone, for joining us. With me on the call are Jen Lloyd, our CEO, and our CFO, Nancy Erbo. After Jen and Nancy's prepared remarks, we'll open it up for questions. Our discussion today will include forward-looking statements denoted by words like will, expect, should, outlook, forecast, and similar expressions that look toward future events or performance. Such statements are subject to risks that may cause actual results to differ from those projected or implied. Such risks are discussed in today's press release, in our most recent annual report on Form 10-K, and in subsequent quarterly reports on Form 10-Q, including the one being filed this afternoon with the SEC. During this call, we will refer to financial measures not calculated according to GAAP. Non-GAAP income statement measures in the first quarter excludes based compensation expenses, amortization of acquisitions related to intangible assets, restructuring charges, and the tax effects of these items. A reconciliation of non-GAAP measures to our GAAP results is included in today's press release and in the accompanying slides, both of which can be found on our investor website at investors.power.com. This call is the property of Power Integrations, and any recording or rebroadcast is expressly prohibited without the written consent of Power Integrations. Now I'll turn it over to Jen.

Thanks, Joe, and thank you, everyone, for joining us today. I'm pleased with how we've started the year with Q1 revenue of $108 million and non-GAAP earnings of 25 cents per diluted share. Industrial was the main driver of revenue growth again this quarter, up 23% year over year. Consumer revenue was down compared to the first quarter of 2025, which had been unusually strong due to tariff-related pull-ins in appliances. However, we saw a 17% sequential increase in Q1, as that inventory build appears to have cleared. Looking ahead, while visibility is somewhat hampered by the ongoing macro uncertainty, we've seen an increase in order activity since our last earnings call, and we're forecasting seasonally higher revenue in the second quarter, along with higher growth margin. Just as importantly, we're making good progress on our strategic focus areas. Customer centricity, streamlining our product pipeline for time to market, and operational and organizational efficiency. Firstly, we are improving alignment between our commercial and engineering teams to bring the customer's voice closer to our product development process. Reinforcing this customer commitment, earlier this week we announced the addition of Mike Vallow to our leadership team as SVP of Worldwide Sales. Mike is a veteran sales leader with deep experience and power, having led the sales organizations at OnSemi, Infineon, and Cypress. I'm excited to have him on the team. And I'm confident that he will both strengthen our existing relationships and help us expand our customer reach in markets like data center and automotive. Secondly, we're streamlining our product pipeline to accelerate time to market on the projects most tightly aligned with our target markets and long-term strategy. And finally, we are implementing organizational changes to drive operational effectiveness and redirect resources, both functionally and geographically to the opportunities most critical to our long-term growth. Although it will take time for these changes to be reflected in our results, I'm encouraged by our progress. And over time, you will see product releases with quicker time to revenue based on earlier customer engagement and improved alignment between our products and customer needs. For example, our new Tiny Switch 5 is off to a strong start with a wide range of designs set to ramp in the second half of the year. And we also expect a nice ramp with top switch GAN, which we introduced at the APEC show in March. The tiny switch and top switch names are well known in the power supply industry with billions of units shipped and an embedded base of designers accustomed to using these proven architectures. Even as we pivot towards the AI data center, industrial and automotive markets, we're refreshing these existing product families to sustain and grow core markets like appliances, where reliability and efficiency are highly valued and dollar content is rising along with appliance power levels. The addition of a PowiGAN switch more than doubles the power capability of the top switch architecture to 440 watts, so designers can now use these classic flyback topology for a wider range of designs than ever before. The flyback topology offers a variety of benefits, including smaller board footprint, faster design cycles, high standby efficiency, and lower component count. In fact, a flyback power supply can save up to 30% on both component count and BOM cost compared to the more complex topologies typically used above 200 watts. TopGAN is already opening doors for us at new customers, designing high-power chargers for industrial applications, drones, and e-bikes, where flybacks now have access to sockets that have historically been off-limits. We're also seeing strong engagements at appliance customers, many of whom have been using Top Switch for years and are excited to realize the efficiency benefits of GAN in their designs. In automotive, we're currently in production or in design engagements with 17 of the top 20 EV manufacturers, and we're on track to double our automotive revenue this year. In the first quarter, we want a new emergency power supply design with China's second largest EV OEM, And as mentioned on last quarter's call, we also began production in Q1 at a major German carmaker using a platform developed as part of its joint venture with a US EV OEM. As we continue to accumulate wins for inverter emergency power supplies, we are also expanding engagements with customers for next-gen EVs featuring micro DC to DC converters. These power supplies will bypass the 12 volt batteries used in today's EVs, instead powering subsystems directly from the main high voltage battery. We are also developing products for higher power sockets, such as onboard charging, using our 1250 volt GAN technology. As we expand our automotive product portfolio to address evolving EV architectures, we see addressable dollar content rising from single digit dollars today to tens of dollars in the near term, and approaching $100 per vehicle over the next several years. Our high power business, which sits in the industrial category, continues to grow at a healthy pace, driven by a diverse set of verticals, including electric rail, renewables, oil and gas, and power grid applications, including DC transmission and power quality. Key design wins in Q1 included a design for six megawatt wind turbines at a European customer and at statcom power conditioning design for an Indian customer. Lastly, turning to everybody's favorite topic, data center, we continue to pursue multiple paths to growth with our unique PowiGAN technology. Our ongoing collaboration with NVIDIA includes a variety of sockets utilizing our 1250 and 1700 volt GAN technologies in the forthcoming 800 volt DC architectures. We continue to gain share in AUX power supplies for today's data centers, winning two new designs in Q1 at Taiwan customers serving US equipment makers. We also have ongoing customer engagements on upcoming higher power GAN products for rack level AC to DC conversion. The data center rack is one of the most attractive opportunities in power semiconductors today. We believe our differentiated GAN technology gives us a significant competitive advantage and customers are looking to us as they develop long-term roadmaps calling for higher voltages and improving power density. But our opportunity in data center goes beyond the rack. The demands that data centers are placing on the power grid are just as important and challenging, and we are well positioned to respond with our high power products. Power grids are rapidly evolving to support the estimated 200 gigawatts of power needed for data centers by 2030. Renewable energy, including dedicated installations for data centers, is certain to become a bigger part of the energy mix accompanied by battery storage to ensure consistent availability. High voltage transmission lines will deliver renewable energy to the grid or directly to the data center, and solid state transformers will convert power at the front end of the data center to be delivered to the rack. The value of our gate driver products is proven in renewable energy, battery storage, and high voltage transmission. which together accounted for about 40% of our high power revenue in the first quarter. We have a strong offering for solid state transformers as well with a differentiated driver solution for silicon carbide modules. We have a variety of data center related customer engagements underway in high power and we anticipate that opportunities related to the data center build out will add hundreds of millions of dollars to our SAM for gate driver products in the years ahead. Altogether, we estimate that our data center SAM, including rack and grid applications, will exceed $1 billion by 2030. In closing, the opportunities ahead of us grow more attractive by the day as markets demand more of the technology and system expertise that PI has developed over many years. We are a pure play high voltage company with foundational technologies like PowiGAN and scale gate drivers backed by deep system expertise and we are building an organization capable of turning our foundational advantages into long-term value for our customers and shareholders. Now I'll turn it over to Nancy for a review of the financial highlights.