Power Integrations ((POWI)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Power Integrations presented a mixed sentiment, reflecting both promising growth prospects and notable challenges. While the company showcased strong advancements in GaN technology and expansion efforts in India, it also faced hurdles in the communications segment and inventory management. This balanced view underscores the company’s current standing in the market.
Revenue Growth in Key Segments
Power Integrations reported an 18% year-over-year increase in revenue, reaching $105 million. This growth was driven by significant gains in the consumer segment, which rose by more than 35%, and the computer segment, up over 10%. The industrial segment saw a modest 3% increase. Despite a decline in overall yearly performance, these key segments demonstrated strong growth potential.
Successful GaN Adoption and Industry Recognition
The company is making significant strides with GaN technology, which is expected to account for over 10% of sales. The 1700-volt Innomax 2 ICs have garnered multiple industry awards, reinforcing Power Integrations’ leadership in this innovative technology.
Expansion in India
Power Integrations has expanded its footprint in India, capturing significant market shares in metering and fixed wireless rollouts. The company is also supplying gate drivers for electric locomotives, marking a strategic expansion into this growing market.
Significant Revenue Decline in Communications
The company faced a substantial revenue decline in the communications segment, falling more than 60% following its exit from the China OEM cell phone business. This downturn significantly impacted the overall revenue performance.
Q4 Sequential Revenue Decrease
In Q4, Power Integrations experienced a 9% sequential decline in revenue. The consumer segment fell by mid-teens sequentially, and industrial revenues decreased by 10%, primarily due to the timing of shipments for metering applications.
Inventory Challenges
The company reported an increase in inventory days to 315 at quarter-end, up 24 days from the previous quarter. This rise reflects the sequentially lower revenues and indicates inventory levels remain significantly above target.
Positive Outlook for 2025
Power Integrations’ guidance for 2025 projects sustained revenue growth across all segments, with the industrial sector leading the charge. Growth is expected to be fueled by infrastructure projects, including high voltage DC transmission and renewables. The company forecasts a 15% year-over-year revenue increase for Q1, supported by GaN technology adoption and market expansions in India.
In conclusion, Power Integrations’ earnings call highlighted a balanced outlook with both opportunities and challenges. While the company is poised for growth in several key areas, particularly with GaN technology and its expansion in India, challenges in the communications segment and inventory management remain areas to watch. Investors can look forward to potential growth driven by strategic initiatives and technological advancements.
