The following discussion and analysis has been prepared as an aid to understanding our financial condition and results of operations. It should be read in conjunction with the condensed consolidated financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q, and with the consolidated financial statements and management’s discussion and analysis of our financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 6, 2026. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed under the caption “Risk Factors” included in this report. See also “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this report. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Factors that could cause actual results to differ materially from those predicted include, but are not limited to: •The demand for our products declining in the major end markets we serve, which may occur due to competitive factors, supply chain fluctuations, rising inflation, or other changes in macroeconomic or geopolitical conditions; •our inability to penetrate new markets for our products; •the volume and timing of orders received from customers; •our ability to develop and bring new products and technologies to market, including on a timely basis; •reliance on international sales activities for a substantial portion of our revenue; •the length of our sales cycle; •the significant sales of our products through distributors, which limits our direct interaction with our end customers, reducing our ability to forecast sales, and increasing the complexity of our business; •the cyclical nature of the power supply industry and cyclical market patterns across different end markets for which our products are used; •competitive pressures on selling prices; •risks associated with our supply chain including, the volume, cost, and timing of delivery of orders placed by us with our wafer foundries and assembly subcontractors, and their ability to procure materials; •undetected defects, quality issues, warranty claims, or product recalls related to our products; •our ability to attract and retain qualified personnel; •changes in global trade policy, including tariffs, could reduce demand for end products that incorporate our products, which could have a material adverse effect on our revenue and operating results; •our ability to realize the expected benefits of restructuring initiatives designed to reduce costs and create a more efficient organization; •debt obligations we incur in the future could adversely affect our financial condition; •the inability to adequately protect or enforce our intellectual property rights; •we have been and may be subject to or involved in litigation, threatened litigation, or other disputes, the outcome of which may be difficult to predict, and which may be costly to defend, divert management attention, require us to pay damages, or restrict the operation of our business; •changes in tax rules and regulations, changes in interpretation of tax rules and regulations, or unfavorable assessments from tax audits may increase the amount of taxes we are required to pay and require management time and attention; •continued impact of changes in securities laws and regulations, including potential risks resulting from our evaluation of our internal controls over financial reporting; •current or potential war, domestic or international conflict, political or social instability, or military actions, including the conflicts in Ukraine and the Middle East; •failure, disruption, security breaches, or other incidents impacting our information technology infrastructure or information management systems; 22 Table of Contents •interruptions in our information technology systems; •unfavorable or uncertain market conditions and risks relating to the adoption, use, or application of emerging technologies, including AI, by our customers and in our business; •fluctuations in exchange rates, particularly the exchange rate between the U.S. dollar and the Japanese yen, the euro and the Swiss franc; •earthquakes, fire, global health crises, or other disasters; •risks associated with acquisitions and strategic investments; and •our ability to successfully integrate, or realize the expected benefits from, our acquisitions. Overview We are a leading innovator in semiconductor technologies for high-voltage power conversion. Our products are key building blocks in the clean-power ecosystem, enabling the generation of renewable energy as well as the efficient transmission and consumption of power in applications ranging from milliwatts to megawatts. Our revenue was $118.9 million and $115.9 million in the three months ended June 30, 2026 and 2025, respectively, and $227.2 million and $221.4 million in the six months ended June 30, 2026 and 2025, respectively. The increase in revenue for the three- and six-month periods reflected higher sales in the industrial end market. Our top ten customers, including distributors that resell to OEMs and merchant power supply manufacturers, accounted for approximately 82% and 81% of our revenue for the three and six months ended June 30, 2026 and approximately 81% in each of the corresponding periods of 2025. International sales accounted for approximately 98% of our revenue for each of the three and six months ended June 30, 2026, respectively, and 98% and 99%, respectively, in the corresponding periods of 2025. Our gross margin was 54% and 55% for the three months ended June 30, 2026 and 2025, respectively, and 53% and 55% for the six months ended June 30, 2026 and 2025, respectively. The decrease in gross margin was primarily due to less favorable customer and product mix related to increased sales of lower margin products and decreased sales of higher margin products as well as less favorable impact of the dollar/yen exchange rate on our wafer costs and, for the six-month period, restructuring costs recorded in cost of sales. Total operating expenses were $55.7 million and $65.3 million for the three months ended June 30, 2026 and 2025, respectively, and $111.2 million and $116.8 million for the six months ended June 30, 2026 and 2025, respectively. The decrease in operating expenses for the three- and six-month periods was primarily due to a non-recurring expense related to an employee litigation matter that occurred in the prior-year period as described in Note 11 Commitments and Contingencies of this report. These decreases were partially offset by restructuring and related charges for severance and benefit costs associated with the workforce reduction described in Note 13 Restructuring of this report. Our management team continuously evaluates operations to better align our organization with market opportunities, increase operational efficiency, decrease costs and increase profitability. In connection with this, a restructuring plan was undertaken in the first quarter of 2026, reducing the Company’s workforce by approximately 7% to better align our expenses with revenue and create flexibility to invest in the products, people, and markets that are expected to drive long-term growth and profitability. As a result, we recognized restructuring charges of $6.6 million during the first quarter of 2026, primarily composed of severance costs. The restructuring plan was substantially completed in the first quarter of 2026. Capital Return Program. We remain committed to delivering stockholder value through our stock repurchase and dividend programs. Under future programs authorized by our Board of Directors, we may repurchase shares of our common stock in the open-market or through privately negotiated transactions. The extent to which we repurchase our stock and the timing of such repurchases will depend upon market conditions, the rules and regulations governing repurchases and other corporate considerations, as determined by our management team. During the three and six months ended June 30, 2026, we returned $11.9 million and $23.8 million, respectively, of capital to stockholders through the payment of cash dividends. We continue to monitor the environment for potential long-term impact on supply and demand from tariffs. Critical Accounting Policies and Estimates The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the 23 Table of Contents financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those listed below. We base our estimates on historical facts and various other assumptions that we believe to be reasonable at the time the estimates are made. Actual results could differ from those estimates. Critical accounting policies are important to the portrayal of our financial condition and results of operations and require us to make judgments and estimates about matters that are inherently uncertain. There have been no material changes to our critical accounting policies and estimates disclosed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” and Note 2, Significant Accounting Policies and Recent Accounting Pronouncements, in each case in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 6, 2026. Currently, our only critical accounting policies relate to revenue recognition and estimating write-downs for excess and obsolete inventory. Results of Operations The following table sets forth certain operating data as a percentage of net revenue for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net revenue 100.0 % 100.0 % 100.0 % 100.0 % Cost of revenue 45.7 44.8 46.5 44.8 Gross profit 54.3 55.2 53.5 55.2 Operating expenses: Research and development 22.8 22.4 23.5 22.6 Selling, general and administrative 23.6 26.0 23.1 26.0 Other operating expenses (income) 0.4 7.9 (0.4) 4.1 Restructuring and related charges — — 2.7 — Total operating expenses 46.8 56.3 48.9 52.7 Income (loss) from operations 7.5 (1.1) 4.6 2.5 Other income 2.0 2.3 2.1 2.6 Income before income taxes 9.5 1.2 6.7 5.1 Provision for (benefit from) income taxes 1.2 — 0.9 0.5 Net income 8.3 % 1.2 % 5.8 % 4.6 % Comparison of the three and six months ended June 30, 2026 and 2025 Net revenue. Net revenue consists of revenue from product sales, net of returns and allowances. Net revenue for the three and six months ended June 30, 2026 was $118.9 million and $227.2 million, respectively, and $115.9 million and $221.4 million, respectively, in the corresponding periods of 2025. The increases in net revenue for the three- and six-month periods were due to higher sales in the industrial end-market. 24 Table of Contents Our revenue mix by end market for the three and six months ended June 30, 2026 and 2025 was as follows: Three Months Ended June 30, Six Months Ended June 30, End Market 2026 2025 2026 2025 Communications 10 % 11 % 10 % 10 % Computer 11 % 12 % 11 % 12 % Consumer 36 % 37 % 37 % 41 % Industrial 43 % 40 % 42 % 37 % International sales, consisting of sales outside of the United States of America based on “bill to” customer locations, were $116.9 million and $223.4 million in the three and six months ended June 30, 2026, respectively, and $114.0 million and $218.2 million, respectively, in the corresponding periods of 2025. Although power converters using our products are distributed to end markets worldwide, most are manufactured in Asia. As a result, sales to this region represented approximately 81% of our net revenue in each of the three and six months ended June 30, 2026 and approximately 84% in each of the corresponding periods of 2025. We expect international sales, and sales to the Asia region in particular, to continue to account for a large portion of our net revenue in the future. Sales to distributors accounted for approximately 72% of our net revenue in each of the three and six months ended June 30, 2026, respectively, and approximately 70% and 71%, respectively, in the corresponding periods of 2025. Direct sales to OEMs and merchant power-supply manufacturers accounted for the remainder. Gross profit. Gross profit is net revenue less cost of revenue. Our cost of revenue consists primarily of the purchase of wafers from our contracted foundries, the assembly, packaging and testing of our products by sub-contractors, product testing performed in our own facility, overhead associated with the management of our supply chain and the amortization of acquired intangible assets. The following table compares gross profit and gross margin for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2026 2025 2026 2025 Net revenue $ 118.9 $ 115.9 $ 227.2 $ 221.4 Gross profit $ 64.6 $ 64.0 $ 121.6 $ 122.2 Gross margin 54.3 % 55.2 % 53.5 % 55.2 % The decrease in gross margin was primarily due to less favorable customer and product mix related to increased sales of lower margin products and decreased sales of higher margin products as well as less favorable impact of the dollar/yen exchange rate on our wafer costs. Research and development expenses. Research and development (“R&D”) expenses consist primarily of employee compensation including salaries and stock-based compensation, as well as expensed material and facility costs associated with the development of new processes and products. We also record R&D expenses for prototype wafers related to new products until the products are released to production. The following table compares R&D expenses for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2026 2025 2026 2025 Research and development expenses $ 27.2 $ 26.0 $ 53.4 $ 50.1 R&D expenses increased for the three and six months ended June 30, 2026 compared to the corresponding period of 2025, primarily due to application engineer project costs related to customer product development projects as described in Note 13 Restructuring of this report, as well as increased product-development expenses. These increases were partially offset by lower equipment-related expenses and lower stock-based compensation expenses. Selling, General and Administrative. Selling, general and administrative (“SG&A”) expenses consist primarily of employee compensation including salaries, commissions and stock‑based compensation for personnel across our sales representatives, administration, finance, human resources, and general management functions. SG&A expenses also include facilities‑related costs associated with our regional sales and support offices, as well as consulting, professional 25 Table of Contents services, legal and auditing expenses. The following table below compares SG&A expenses for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2026 2025 2026 2025 Selling, general and administrative expenses $ 28.1 $ 30.2 $ 52.5 $ 57.6 SG&A expenses decreased for the three and six months ended June 30, 2026 compared to the corresponding periods of 2025 primarily due to the restructuring actions taken in the three months ended March 31, 2026 as described in Note 13 Restructuring of this report. The decrease was partially offset by increases in professional legal services. Other operating expenses. Other operating expenses were $0.5 million in the three months ended June 30, 2026 and a credit of $0.9 million in the six months ended June 30, 2026. These items relate to the quarterly remeasurement of unvested equity awards associated with our retired former chief executive officer. Refer to Note 8 Stockholders' Equity of this report for details. Restructuring and related charges. Restructuring and related charges were $6.6 million in the six months ended June 30, 2026. The charges were primarily related to severance and benefit costs associated with the workforce reduction described in Note 13 Restructuring of this report. Other income. Other income consists primarily of interest income earned on cash and cash equivalents, marketable securities and other short-term investments, and the impact of foreign exchange gains or losses. The table below compares other income for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2026 2025 2026 2025 Other income $ 2.3 $ 2.7 $ 4.8 $ 5.9 Other income decreased for the three and six months ended June 30, 2026 as compared to the corresponding period of 2025 primarily due to lower interest income. Provision for income taxes. Provision for income taxes represents federal, state and foreign taxes. The table below compares income-tax expense for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in millions) 2026 2025 2026 2025 Provision for (benefit from) income taxes $ 1.4 $ — $ 2.0 $ 1.1 Effective tax rate 12.5 % (1.8) % 13.3 % 9.5 % Income-tax expense includes a provision for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to us and our subsidiaries, adjusted for certain discrete items which are fully recognized in the period in which they occur. Accordingly, the interim effective tax rate may not be reflective of the annual estimated effective tax rate. Our effective tax rates for the three and six months ended June 30, 2026 were 12.5% and 13.3%, respectively, and (1.8%) and 9.5%, in the corresponding periods of 2025. The effective tax rate in these periods was lower than the statutory federal income-tax rate of 21% due to the geographic distribution of our world-wide earnings in lower-tax jurisdictions and the impact of federal research tax credits. For the three months ended June 30, 2026, our effective tax rate benefited from a tax accounting windfall related to share-based payments. For the six months ended June 30, 2026, our effective tax rate was adversely affected by a tax accounting shortfall related to share-based payments. In the three and six months ended June 30, 2025, our effective tax rate was adversely affected by the recognition of a tax deficiency or “shortfall” related to share-based payments. We have not been granted any incentivized tax rates and do not operate under any tax holidays in any jurisdiction. 26 Table of Contents Liquidity and Capital Resources As of June 30, 2026, we had $262.6 million in cash, cash equivalents and short-term investments, an increase of $13.1 million from $249.5 million as of December 31, 2025. As of June 30, 2026, we had working capital, defined as current assets less current liabilities, of $404.5 million, an increase of approximately $16.5 million from $388.0 million as of December 31, 2025. In 2016, we entered into the Prior Credit Agreement with Wells Fargo Bank, National Association, which provided us with a $75.0 million revolving line of credit to use for general corporate purposes and a $20.0 million sub-limit for the issuance of standby and trade letters of credit with an interest rate based on SOFR. The Prior Credit Agreement had a term which originally extended to June 7, 2026; the Prior Credit Agreement was terminated on April 10, 2026. We were compliant with all covenants and had no advances outstanding under the Prior Credit Agreement as of termination of the Prior Credit Agreement. On February 24, 2026, we entered into the PNC Loan Agreement to replace the Prior Credit Agreement, which became effective and available for use on April 10, 2026 when we terminated the Prior Credit Agreement. The PNC Loan Agreement provides us with a $100.0 million revolving line of credit with a $25.0 million sub-limit for the issuance of standby and trade letters of credit. The interest rate on outstanding borrowings under the PNC Loan Agreement is based on SOFR plus 1.60%. The Company’s obligations under the PNC Loan Agreement are unsecured. The PNC Loan Agreement term extends through February 24, 2031; all advances under the revolving line of credit, together with all accrued and unpaid interest, fees and other obligations owing thereon, will become due on such date, or earlier upon the occurrence of an Event of Default. The PNC Loan Agreement requires us to maintain a Minimum Liquidity of at least $50.0 million as of the last day of each fiscal quarter and a ratio of Funded Indebtedness to Adjusted EBITDA of less than 2.00 to 1.00 as of the last day of each fiscal quarter and determined on a rolling four-quarter basis. The PNC Loan Agreement contains representations and warranties, affirmative covenants and conditions precedent to borrowings that are usual and customary for credit agreements of this type. The PNC Loan Agreement contains certain limited covenants that restrict, subject to certain exceptions, our ability to incur additional indebtedness or liens, guarantee or become liable for obligations of other persons or entities, liquidate, dissolve, merge or consolidate with any other entity or convey, transfer or lease our properties or assets to another person, which, in each case, are subject to certain qualifications and exceptions. We were compliant with all covenants and had no advances outstanding under the PNC Loan Agreement as of June 30, 2026. Cash from Operating Activities Our operating activities generated $42.0 million of cash in the six months ended June 30, 2026. Net income for this period was $13.1 million; we also incurred non-cash stock-based compensation expense, depreciation and a decrease in deferred tax assets of $17.6 million, $12.6 million and $1.8 million, respectively. Sources of cash included a $9.1 million decrease in inventories and a $3.9 million decrease in prepaid expenses and other assets. These sources of cash were partially offset by an $8.5 million increase in accounts receivable due to timing of receipts and a $7.2 million decrease in accounts payable (excluding payables related to property and equipment) due to timing of payments. Our operating activities generated $55.5 million of cash in the six months ended June 30, 2025. Net income for this period was $10.2 million; we also incurred non-cash stock-based compensation expense, depreciation and an increase in deferred tax assets of $18.8 million, $14.2 million and $0.9 million, respectively. Sources of cash included a $10.0 million increase in other accrued liabilities and a $6.4 million decrease in prepaid expenses and other assets. These sources of cash were partially offset by a $2.8 million increase in inventories. Cash from Investing Activities Our investing activities in the six months ended June 30, 2026, resulted in a $9.0 million net use of cash, primarily consisting of $2.7 million for purchases of investments, net of maturities and $6.3 million for purchases of property and equipment. Our investing activities in the six months ended June 30, 2025, generated $37.1 million of cash, primarily consisting of $48.8 million from sales and maturities of investments, net of purchases, partially offset by $11.7 million for purchases of property and equipment—primarily production-related machinery and equipment. 27 Table of Contents Cash from Financing Activities Our financing activities in the six months ended June 30, 2026 resulted in a $21.1 million net use of cash, consisting of $23.8 million for the payment of dividends to stockholders, partially offset by proceeds of $2.7 million from the issuance of shares through our employee stock purchase plan. Our financing activities in the six months ended June 30, 2025 resulted in a $76.6 million net use of cash, consisting of $55.7 million for the repurchase of our common stock and $23.8 million for the payment of dividends to stockholders, partially offset by proceeds of $2.8 million from the issuance of shares through our employee stock purchase plan. Other Information Our cash, cash equivalents and investment balances may change in future periods due to changes in our planned cash outlays, including changes in incremental costs such as direct and integration costs related to future acquisitions. Current U.S. tax laws generally allow companies to repatriate accumulated foreign earnings without incurring additional U.S. federal taxes. Accordingly, as of June 30, 2026, our worldwide cash and short-term investments are available to fund capital allocation needs, including capital and internal investments, acquisitions, stock repurchases and/or dividends without incurring significant U.S. federal income taxes. If our operating results deteriorate in future periods, either as a result of a decrease in customer demand or pricing pressures from our customers or our competitors, or for other reasons, our ability to generate positive cash flow from operations may be jeopardized. In that case, we may be forced to use our cash, cash equivalents and short-term investments, use our current financing or seek additional financing from third parties to fund our operations. We believe that cash generated from operations, together with existing sources of liquidity, will satisfy our projected working capital and other cash requirements for at least the next 12 months. Our uses of cash beyond the next 12 months will depend on many uncertain factors, including the general economic environment in which we operate and our ability to generate cash flow from operations, but include funding our operations and additional capital expenditures.