Power Integrations, Inc. (POWI) Bundle
A Brief History of Power Integrations, Inc.
Power Integrations, Inc. (POWI), a leader in high-performance electronic components, has seen significant developments in its operations and financial performance leading up to 2024. The company's core business revolves around designing and manufacturing semiconductor solutions for power conversion, which are utilized in various applications including consumer electronics, industrial equipment, and renewable energy systems.
Financial Performance Overview
As of September 30, 2024, Power Integrations reported net revenues of $115.8 million for the third quarter, a decrease from $125.5 million in the same quarter of 2023. For the nine months ended September 30, 2024, the company achieved $313.7 million in net revenues, down from $355.0 million in the prior year.
| Period | Net Revenues (in millions) | Cost of Revenues (in millions) | Gross Profit (in millions) | Net Income (in millions) | Earnings Per Share (Basic) | Earnings Per Share (Diluted) |
|---|---|---|---|---|---|---|
| Q3 2024 | $115.8 | $52.7 | $63.2 | $14.3 | $0.25 | $0.25 |
| Q3 2023 | $125.5 | $59.6 | $65.9 | $19.8 | $0.34 | $0.34 |
| YTD 2024 | $313.7 | $146.2 | $167.5 | $23.1 | $0.41 | $0.40 |
| YTD 2023 | $355.0 | $172.3 | $182.7 | $41.5 | $0.72 | $0.72 |
Operating Expenses and Profitability
For the nine months ended September 30, 2024, Power Integrations incurred total operating expenses of $153.5 million compared to $146.6 million for the same period in 2023. The increase was driven primarily by higher research and development costs, which totaled $75.1 million in 2024, up from $72.6 million in 2023.
Cash Flow and Dividends
In the nine months ended September 30, 2024, the company generated $66.5 million in cash from operating activities. Cash used in investing activities amounted to $17.5 million, while financing activities resulted in a net use of $54.4 million, largely due to dividend payments and stock repurchases.
| Activity Type | Cash Flow (in millions) |
|---|---|
| Operating Activities | $66.5 |
| Investing Activities | ($17.5) |
| Financing Activities | ($54.4) |
The board of directors declared dividends of $0.20 per share for the fourth quarter of 2023 and at the end of each quarter in 2024. In October 2024, the quarterly cash dividend was raised to $0.21 per share.
Market Position and Customer Base
Power Integrations maintains a robust customer base, with key clients accounting for a significant portion of revenues. The top ten customers represented approximately 78% of net revenues for the three and nine months ended September 30, 2024. Notable customers include Avnet and Honestar Technologies, which contributed 31% and 10% of revenues, respectively.
International Sales and Market Trends
International sales accounted for $114.1 million and $308.7 million for the three and nine months ended September 30, 2024, respectively. The Asia region continues to be a major market, representing 85% of net revenues during the same periods.
Power Integrations' strategic focus on innovation and expanding its market presence positions it well to navigate the challenges in the semiconductor industry and capitalize on emerging opportunities in power conversion technology.
A Who Owns Power Integrations, Inc. (POWI)
Shareholder Composition
As of 2024, Power Integrations, Inc. (POWI) has a diverse ownership structure. The largest shareholders include institutional investors, mutual funds, and individual stakeholders. The table below summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Type | Ownership Percentage |
|---|---|---|
| Vanguard Group, Inc. | Institutional Investor | 9.5% |
| BlackRock, Inc. | Institutional Investor | 8.2% |
| State Street Corporation | Institutional Investor | 5.6% |
| Wellington Management Group LLP | Institutional Investor | 5.0% |
| Invesco Ltd. | Institutional Investor | 4.8% |
| Individual Stakeholders | Various | 67.9% |
Recent Stock Performance
Power Integrations, Inc. has seen fluctuations in its stock price throughout 2024. As of September 30, 2024, the stock was trading at approximately $63.00 per share, reflecting a year-to-date decline of around 12%. The company’s market capitalization was about $3.6 billion.
Financial Performance Overview
For the nine months ended September 30, 2024, Power Integrations reported the following financial metrics:
| Metric | Value |
|---|---|
| Net Revenues | $313.7 million |
| Net Income | $23.1 million |
| Earnings Per Share (EPS) | $0.41 |
| Gross Profit | $167.5 million |
| Operating Expenses | $153.5 million |
Dividends
Power Integrations has consistently paid dividends to its shareholders. The declared dividends for 2024 are as follows:
| Quarter | Dividend per Share |
|---|---|
| Q1 2024 | $0.20 |
| Q2 2024 | $0.20 |
| Q3 2024 | $0.20 |
| Q4 2024 | $0.21 (proposed) |
Customer Concentration
Power Integrations’ revenue is significantly influenced by a small number of customers. The following table outlines the major customers representing 10% or more of net revenues for the three and nine months ended September 30, 2024:
| Customer | Percentage of Revenues (Q3 2024) |
|---|---|
| Avnet | 31% |
| Honestar Technologies Co., Ltd. | 10% |
| Salcomp Group | Less than 10% |
Geographic Revenue Distribution
The geographic distribution of revenues indicates a strong international presence, with significant sales in Asia. The following table summarizes the geographic revenue breakdown for the nine months ended September 30, 2024:
| Region | Revenue (in millions) | Percentage of Total Revenue |
|---|---|---|
| Asia | $220.4 million | 70.4% |
| Americas | $70.3 million | 22.4% |
| Europe | $23.0 million | 7.2% |
Ownership Trends
In recent years, Power Integrations has seen an increase in institutional ownership, reflecting growing confidence among major investors. The trend indicates a shift towards more professional management of the company’s shares, likely impacting its stock volatility and performance.
Power Integrations, Inc. (POWI) Mission Statement
Overview of Mission Statement
Power Integrations, Inc. focuses on providing high-performance semiconductor solutions for power conversion. Their mission emphasizes delivering innovative technologies that enhance energy efficiency and reduce environmental impact. They aim to lead the market with cutting-edge products and solutions that empower customers across various industries.
Financial Performance Indicators
As of September 30, 2024, Power Integrations reported net revenues of $115.8 million for the third quarter, down from $125.5 million in the same quarter of 2023. For the nine months ended September 30, 2024, net revenues totaled $313.7 million, compared to $355.0 million for the same period in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Revenues | $115.8 million | $125.5 million | $313.7 million | $355.0 million |
| Gross Profit | $63.2 million | $65.9 million | $167.5 million | $182.7 million |
| Net Income | $14.3 million | $19.8 million | $23.1 million | $41.5 million |
| Operating Expenses | $51.6 million | $48.2 million | $153.5 million | $146.6 million |
Market Segmentation
Power Integrations' revenue is derived from diverse end markets, including communications, computers, consumer electronics, and industrial applications. The revenue mix for the third quarter of 2024 reveals the following distribution:
| End Market | Q3 2024 | Q3 2023 |
|---|---|---|
| Communications | 12% | 32% |
| Computer | 14% | 10% |
| Consumer | 38% | 26% |
| Industrial | 36% | 32% |
International Sales
International sales accounted for 98% of the company's net revenues in both the third quarter and the nine months ended September 30, 2024. Sales outside the United States were $114.1 million for Q3 2024, compared to $123.3 million for Q3 2023.
Customer Concentration
Power Integrations' top ten customers represented approximately 78% of net revenues for both the three and nine months ended September 30, 2024. A detailed breakdown of significant customers is as follows:
| Customer | Q3 2024 Percentage | Q3 2023 Percentage | 9M 2024 Percentage | 9M 2023 Percentage |
|---|---|---|---|---|
| Avnet | 31% | 28% | 30% | 26% |
| Honestar Technologies Co., Ltd. | 10% | 23% | 11% | 17% |
| Salcomp Group | 11% |
Research and Development Investments
Power Integrations continues to invest in research and development, with R&D expenses reported at $25.8 million for Q3 2024, an increase from $24.1 million in Q3 2023. The nine-month R&D expenses totaled $75.1 million in 2024, compared to $72.6 million in the prior year.
Stockholder Equity and Dividends
As of September 30, 2024, total stockholders' equity was $749.2 million, a decrease from $785.1 million in 2023. The company paid dividends of $11.4 million across three payments in 2024, with a quarterly dividend of $0.19 per share.
| Equity Metric | 2024 | 2023 |
|---|---|---|
| Total Stockholders' Equity | $749.2 million | $785.1 million |
| Dividends Paid | $11.4 million | $10.9 million |
Conclusion
Power Integrations, Inc. remains committed to its mission of innovation in power conversion technologies while navigating a challenging market environment. The company's focus on sustainability and efficiency continues to be a central theme in its strategic objectives.
How Power Integrations, Inc. (POWI) Works
Company Overview
Power Integrations, Inc. (POWI) specializes in the design, development, manufacture, and marketing of integrated circuits and related components for high-voltage power-conversion applications. The company’s products are primarily used in applications such as power supplies for consumer electronics, industrial equipment, and LED lighting.
Financial Performance
As of September 30, 2024, Power Integrations reported net revenues of $115.8 million for the three months ended September 30, 2024, compared to $125.5 million for the same period in 2023. For the nine months ended September 30, 2024, net revenues were $313.7 million, down from $355.0 million in the prior year.
| Period | Net Revenues (in millions) | Gross Profit (in millions) | Gross Margin (%) |
|---|---|---|---|
| Q3 2024 | $115.8 | $63.2 | 54.5% |
| Q3 2023 | $125.5 | $65.9 | 52.5% |
| 9M 2024 | $313.7 | $167.5 | 53.4% |
| 9M 2023 | $355.0 | $182.7 | 51.5% |
Revenue Breakdown by End Market
The revenue mix by end market for the three and nine months ended September 30, 2024, compared to 2023 is as follows:
| End Market | Q3 2024 (%) | Q3 2023 (%) | 9M 2024 (%) | 9M 2023 (%) |
|---|---|---|---|---|
| Communications | 12% | 32% | 11% | 30% |
| Computer | 14% | 10% | 14% | 12% |
| Consumer | 38% | 26% | 40% | 26% |
| Industrial | 36% | 32% | 35% | 32% |
Sales Channels and Customer Concentration
Sales to distributors accounted for 70% of total revenues in both the three and nine months ended September 30, 2024. The top ten customers comprised approximately 78% of net revenues for the same periods.
| Customer | Q3 2024 (%) | Q3 2023 (%) | 9M 2024 (%) | 9M 2023 (%) |
|---|---|---|---|---|
| Avnet | 31% | 28% | 30% | 26% |
| Honestar Technologies Co., Ltd. | 10% | 23% | 11% | 17% |
| Salcomp Group | 11% |
Operating Expenses
Total operating expenses for the three months ended September 30, 2024, were $51.6 million, an increase from $48.2 million in Q3 2023. For the nine months, operating expenses were $153.5 million, compared to $146.6 million in the same period in 2023.
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) | 9M 2024 (in millions) | 9M 2023 (in millions) |
|---|---|---|---|---|
| Research and Development | $25.8 | $24.1 | $75.1 | $72.6 |
| Sales and Marketing | $17.1 | $16.2 | $50.9 | $49.1 |
| General and Administrative | $8.6 | $7.9 | $27.5 | $25.0 |
Net Income and Earnings Per Share
For the three months ended September 30, 2024, net income was $14.3 million, down from $19.8 million in Q3 2023. For the nine months, net income was $23.1 million, compared to $41.5 million in the prior year. Earnings per share (EPS) for the same periods were:
| Period | Basic EPS | Diluted EPS |
|---|---|---|
| Q3 2024 | $0.25 | $0.25 |
| Q3 2023 | $0.34 | $0.34 |
| 9M 2024 | $0.41 | $0.40 |
| 9M 2023 | $0.72 | $0.72 |
Liquidity and Capital Resources
As of September 30, 2024, Power Integrations had cash, cash equivalents, and short-term marketable securities totaling $303.8 million, a decrease from $311.6 million as of December 31, 2023. Working capital was $457.1 million, down from $462.7 million at the end of 2023.
Marketable Securities
As of September 30, 2024, the company had total marketable securities valued at $247.6 million with significant unrealized losses recorded. The breakdown of these securities is as follows:
| Category | Estimated Fair Value (in thousands) | Gross Unrealized Losses (in thousands) |
|---|---|---|
| Corporate Securities (Due in 3 months or less) | $10,646 | ($42) |
| Commercial Paper (Due in 4-12 months) | $49,066 | ($347) |
| Corporate Securities (Due in 12 months or greater) | $187,928 | ($322) |
Research and Development Focus
Research and Development (R&D) expenses were $25.8 million for the three months ended September 30, 2024, and $75.1 million for the nine months, reflecting a continued investment in new technologies and product development.
How Power Integrations, Inc. (POWI) Makes Money
Revenue Overview
Power Integrations, Inc. (POWI) generates its revenue primarily through the sale of integrated circuits and related components used in high-voltage power conversion applications. For the three months ended September 30, 2024, the company reported net revenues of $115.8 million, a decrease from $125.5 million in the same period of 2023. For the nine months ended September 30, 2024, net revenues totaled $313.7 million, compared to $355.0 million in 2023.
Cost Structure
The cost of revenues for the three months ended September 30, 2024, was $52.7 million, resulting in a gross profit of $63.2 million and a gross margin of 54.5%. In the nine-month period, the cost of revenues was $146.2 million, leading to a gross profit of $167.5 million and a gross margin of 53.4%.
| Period | Net Revenues | Cost of Revenues | Gross Profit | Gross Margin |
|---|---|---|---|---|
| Q3 2024 | $115.8 million | $52.7 million | $63.2 million | 54.5% |
| Q3 2023 | $125.5 million | $59.6 million | $65.9 million | 52.5% |
| 9M 2024 | $313.7 million | $146.2 million | $167.5 million | 53.4% |
| 9M 2023 | $355.0 million | $172.3 million | $182.7 million | 51.5% |
Market Segments
Power Integrations operates across various market segments, with a notable focus on the following:
- Consumer Electronics
- Computer Equipment
- Industrial Applications
- Communications
The revenue mix by end market for the three months ended September 30, 2024, was:
| End Market | Percentage of Revenue |
|---|---|
| Consumer | 38% |
| Industrial | 36% |
| Computer | 14% |
| Communications | 12% |
Customer Concentration
Power Integrations has a high customer concentration, with the top ten customers accounting for approximately 78% of net revenues for both the three and nine months ended September 30, 2024. This represents a decrease from 83% and 81% in the corresponding periods of 2023. Notably, international sales represented 98% of total net revenues in both periods.
Operating Expenses
Total operating expenses for the three months ended September 30, 2024, were $51.6 million, compared to $48.2 million in Q3 2023. For the nine months ended September 30, 2024, operating expenses totaled $153.5 million, up from $146.6 million in 2023.
| Operating Expense Category | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Research and Development | $25.8 million | $24.1 million | $75.1 million | $72.6 million |
| Sales and Marketing | $17.1 million | $16.2 million | $50.9 million | $49.1 million |
| General and Administrative | $8.6 million | $7.9 million | $27.5 million | $25.0 million |
Net Income
Net income for the three months ended September 30, 2024, was $14.3 million, compared to $19.8 million in 2023. For the nine months ended September 30, 2024, net income was $23.1 million, down from $41.5 million in 2023.
| Period | Net Income |
|---|---|
| Q3 2024 | $14.3 million |
| Q3 2023 | $19.8 million |
| 9M 2024 | $23.1 million |
| 9M 2023 | $41.5 million |
Cash Flow
For the nine months ended September 30, 2024, cash provided by operating activities was $66.5 million. The company incurred $17.5 million in cash used for investing activities and a net use of cash from financing activities of $54.4 million.
Power Integrations, Inc. (POWI) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Power Integrations, Inc. (POWI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Power Integrations, Inc. (POWI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Power Integrations, Inc. (POWI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.