- Q2 2025 Revenue Growth Revenue rose to $116 million, a 9% YoY increase, with non-GAAP EPS at $0.35.
- Industrial Segment Surge Revenue grew nearly 30% sequentially, driven by metering, automation, and high-power demand.
- Bookings Slowdown July bookings declined 20% from prior months, reflecting customer caution over tariffs and inventory adjustments.
- Q3 Guidance Revenue forecasted at $118M (±$5M), with non-GAAP gross margin of 55–55.5% and operating expenses near $47.5M.
- Strategic GaN Focus 1250V GaN tech leads in 800V data centers, with $29M cash flow and $44M returned to shareholders in Q2.
Industrial Strength Continues
Industrial revenue was a standout performer, surging nearly 30% sequentially, driven by metering, home and building automation, and high-power applications. This robust growth indicates strong demand for Power Integrations' GaN solutions in these key sectors.
Consumer Segment Faces Inventory Correction
In contrast, consumer revenue experienced a mid-single-digit sequential decline after a strong first quarter. This contraction is attributed to an inventory correction by customers, particularly in the appliance segment, as mentioned by CEO Jennifer Lloyd.
Guidance and Market Outlook
Despite the short-term slowdown, Power Integrations remains optimistic about its long-term prospects. The company's guidance for Q3 2025 anticipates revenue of $118 million, with a non-GAAP gross margin of 55% to 55.5%. They expect a return to double-digit growth next year, fueled by continued strength in industrial, automotive, and metering segments.
GaN Technology Differentiator
Power Integrations is heavily investing in GaN technology, particularly in high-voltage applications for data centers and automotive. Their unique 1250-volt and 1700-volt GaN offerings provide a significant competitive advantage in these rapidly growing markets. As highlighted by Ms. Lloyd, "Our proprietary GaN technology and system-level expertise give us an advantage in these markets."
Valuation Metrics
With a P/E ratio of 72.26 and a P/S ratio of 5.49, Power Integrations is trading at a premium valuation, reflecting the market's confidence in its long-term growth prospects and its leadership position in GaN technology. However, investors should carefully assess the sustainability of this growth and the potential impact of competition and macroeconomic factors.