Power Integrations, Inc. has recently released its 10-K report, revealing a decline in net revenues from $444.5 million in 2023 to $419.0 million in 2024. The decrease was primarily driven by lower sales into the communications end-market, reflecting greater use of Chinese-made components in chargers manufactured for Chinese smartphone vendors, as well as increased decoupling of smartphone handsets and chargers. However, revenues from the consumer, industrial, and computer categories increased compared to the prior year. International sales represented approximately 98% of net revenues for both 2024 and 2023, with sales to Asia accounting for 84% of net revenues in both years. Sales to distributors accounted for 70% and 69% of net revenues in 2024 and 2023, respectively.
The company's gross profit was $224.8 million, or 54% of net revenues in 2024, compared to $229.0 million, or 52% of net revenues in 2023. The increase in gross margin in 2024 was attributed to the favorable impact of the dollar/yen exchange rate on wafer costs, manufacturing efficiencies, and a greater percentage of sales coming from higher-margin market categories. Total operating expenses in 2024 were $206.8 million, an increase of $12.9 million compared to 2023, primarily due to increased stock-based compensation expense and higher salary* and benefit-related expenses driven by increased headcount, annual salary increases, and higher costs associated with employee health insurance and other benefits.
The company's net income was 7.7% of net revenues in 2024, down from 12.5% in 2023. The decline in net income was attributed to the aforementioned decline in net revenues and the increase in operating expenses. Power Integrations, Inc. serves communications, computer, consumer, and industrial markets and sells its products to original equipment manufacturers and merchant power supply manufacturers through direct sales staff, independent sales representatives, and distributors. The market has reacted to these announcements by moving the company's shares -1.8% to a price of $59.68. Check out the company's full 10-K submission here.
