Monolithic Power Systems Earnings Commentary for the Quarter Ended March 31, 2025
- Record quarterly revenue of $637.6M, up 39.2% YoY
- Strong growth in key segments: Storage & Computing (+77.7% YoY) and Automotive (+66.4% YoY)
- Healthy operating cash flow of $256.4M, up from $167.7M in Q4
- Strong balance sheet with $1.03B in cash and investments
- Positive Q2 guidance with expected revenue growth to $640M-$660M
- Enterprise Data revenue declined 11.2% YoY and 31.8% QoQ
- Non-GAAP operating margin decreased 0.8 points QoQ to 34.7%
- Days of inventory increased to 146 days from 138 days in Q4
- Tax rate increased to 15% from 12.5% in previous quarter
Insights
MPWR delivers remarkable 39.2% YoY revenue growth with expanding operating margins and strong cash generation across diversified markets.
Monolithic Power Systems delivered an impressive Q1 2025 with revenue reaching $637.6 million, representing substantial year-over-year growth of 39.2% and sequential growth of 2.6%. The apparent 90.8% QoQ decline in GAAP net income requires context—it's misleading when viewed in isolation as Q4 2024 included an extraordinary one-time tax benefit. The more meaningful comparison is the 44.6% YoY increase in GAAP net income to $133.8 million.
Profitability metrics remain robust with GAAP gross margin at 55.4% (flat QoQ) and operating margin at 26.5% (up 5.6 points YoY). On a non-GAAP basis, operating margin came in at 34.7%, slightly down from Q4's 35.5% but up 1.6 points year-over-year. This demonstrates MPWR's ability to maintain premium margins despite a 5.9% sequential increase in non-GAAP operating expenses.
Cash generation was exceptional with $256.4 million in operating cash flow, significantly higher than Q4's $167.7 million. The balance sheet strengthened considerably with cash and short-term investments increasing to $1.03 billion from $862.9 million in Q4. While days of inventory increased to 146 from 138 and DSO rose to 31 days from 25, these metrics remain well-managed relative to historical levels.
The Q2 guidance projects revenue of $640-660 million, suggesting continued growth of 0.4%-3.5% sequentially, with stable gross margins of 54.9%-55.5%. This indicates management's confidence in near-term demand strength despite the notoriously cyclical semiconductor environment. The company appears well-positioned to sustain its growth trajectory through its diversified end-market strategy and continued innovation across emerging application areas.
MPWR's strategic diversification pays off with 77.7% growth in Storage & Computing, 66.4% in Automotive, reflecting successful expansion beyond traditional markets.
MPWR's Q1 results demonstrate the effectiveness of its diversification strategy with five of six segments posting over 40% YoY growth. Most impressive is Storage & Computing, which soared 77.7% YoY to $188.5 million (29.6% of total revenue), with sequential growth of 38.1%, driven by strong demand for power solutions in memory and notebooks—likely indicating significant AI-related tailwinds.
The Automotive segment continues its exceptional trajectory, growing 66.4% YoY to $144.9 million, marking the third consecutive quarter of sequential double-digit growth at 12.9%. This outperformance in automotive indicates MPWR is capturing share in critical growth areas like ADAS, body electronics, and infotainment systems as vehicle electrification and content-per-vehicle trends accelerate.
Communications showed remarkable strength with 53.7% YoY growth, primarily from networking and optical solutions, while Consumer and Industrial segments delivered robust YoY growth of 49.3% and 41.1% respectively. The only underperforming segment was Enterprise Data, declining 11.2% YoY and 31.8% QoQ to $132.9 million, though management indicated expected revenue ramps in the second half of 2025.
The company's inventory management strategy reflects a careful balancing act—days of inventory increased slightly to 146 days versus 138 days in Q4, but decreased significantly from 175 days in Q1 2024. This suggests strategic inventory positioning to capture potential market upturns while improving overall inventory efficiency year-over-year.
MPWR's ongoing transformation "from being a chip-only semiconductor supplier to a full-service, silicon-based solutions provider" appears to be succeeding, as evidenced by its March investor day showcasing innovations across Robotics, Automotive, Data Center, Building Automation, Medical, and Audio. This solutions-focused approach allows MPWR to capture more value per design win while deepening customer relationships across diverse high-growth markets.
KIRKLAND, Wash., May 01, 2025 (GLOBE NEWSWIRE) -- MPS will report its results after the market closes on May 1, 2025 and host a question-and-answer webinar at 2:00 p.m. PT / 5:00 p.m. ET. The live event will be held via a Zoom webcast, which can be accessed at https://mpsic.zoom.us/j/92570889542.
| Q1 2025 Financial Summary | (Unaudited) | ||||||||
| GAAP | |||||||||
| Q1'25 | Q4'24 | Q1'24 | QoQ Change | YoY Change | |||||
| Revenue ($k) | 457,885 | Up | Up | ||||||
| Gross Margin | Flat | Up 0.3 pts | |||||||
| Opex ($k) | 156,954 | Up | Up | ||||||
| Operating Margin | Up 0.2 pts | Up 5.6 pts | |||||||
| Net income ($k) | 92,541 | Down | Up | ||||||
| Diluted EPS | 1.89 | Down | Up | ||||||
| Non-GAAP | |||||||||
| Q1'25 | Q4'24 | Q1'24 | QoQ Change | YoY Change | |||||
| Revenue ($k) | Up | Up | |||||||
| Gross Margin | Down 0.1 pts | Flat | |||||||
| Opex ($k) | Up | Up | |||||||
| Operating Margin | Down 0.8 pts | Up 1.6 pts | |||||||
| Net income ($k) | Down | Up | |||||||
| Diluted EPS | Down | Up | |||||||
| Tax Rate | Up 2.5 pts | Up 2.5 pts | |||||||
| Revenue by End Market | ||||||||||||||
| Revenue | YoY Change | % of Revenue | ||||||||||||
| End Market ($M) | Q1’25 | Q1’24 | $ | % | Q1’25 | Q1’24 | ||||||||
| Storage & Computing | 29.6 | % | 23.2 | % | ||||||||||
| Automotive | 144.9 | 87.1 | 57.8 | 22.7 | 19.0 | |||||||||
| Enterprise Data | 132.9 | 149.7 | (16.8 | ) | ( | ) | 20.8 | 32.7 | ||||||
| Communications | 71.8 | 46.7 | 25.1 | 11.3 | 10.2 | |||||||||
| Consumer | 56.9 | 38.1 | 18.8 | 8.9 | 8.3 | |||||||||
| Industrial | 42.6 | 30.2 | 12.4 | 6.7 | 6.6 | |||||||||
| Total | 100 | % | 100 | % | ||||||||||
Ongoing Business Conditions
In Q1 2025, MPS achieved record quarterly revenue of
Our performance during the quarter reflected the continued strength of our diversified market strategy and a continued trend of the ordering patterns we saw at the end of 2024.
Q1 2025 highlights include:
- At our March 20th investor day, we showcased MPS innovation across a range of areas including new opportunities in Robotics, Automotive, Data Center, Building Automation, Medical, and Audio.
- In Q1, Storage and Computing segment revenue increased
38% quarter-over-quarter on strong demand for both memory and notebook solutions. - We continue to win designs across all major Enterprise Data customers with revenue ramps expected in the second half of this year.
- Finally, Q1 ’25 Automotive revenue increased
13% from Q4’24, the third consecutive quarter of sequential double-digit growth.
MPS continues to focus on innovation, solving our customers’ most challenging problems, and maintaining the highest level of quality. We continue to invest in new technology, expand into new markets, and to diversify our end-market applications and global supply chain. This will allow us to capture future growth opportunities, maintain supply stability, and swiftly adapt to market changes as they occur.
“Our proven, long-term growth strategy remains intact as we continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider,” said Michael Hsing, CEO and founder of MPS.
Q1’25 Revenue Results
MPS reported first quarter revenue of
First quarter 2025 Storage and Computing revenue of
First quarter Automotive revenue of
First quarter 2025 Communications revenue of
First quarter 2025 Industrial revenue of
First quarter Consumer revenue of
In our Enterprise Data market, first quarter 2025 revenue of
Q1’25 Gross Margin & Operating Income
GAAP gross margin was
Non-GAAP gross margin for the first quarter of 2025 was
Q1’25 Operating Expenses
Our GAAP operating expenses were
Our Non-GAAP operating expenses were
The differences between non-GAAP operating expenses and GAAP operating expenses for the quarters discussed here are primarily stock-based compensation and related expenses and deferred compensation plan income.
Total stock-based compensation and related expenses, including approximately
The Bottom Line
First quarter 2025 GAAP net income was
First quarter 2025 non-GAAP net income was
The first quarter 2025 non-GAAP tax rate increased to
There were 48.0 million fully diluted shares outstanding at the end of the first quarter of 2025.
Balance Sheet and Cash Flow
Cash, cash equivalents and short-term investments were
Accounts receivable at the end of the first quarter of 2025 were
Our internal inventories at the end of the first quarter of 2025 were
We have carefully managed our internal inventories throughout the year, balancing the uncertainty in the market with being prepared to capture market upturns when they occur. Comparing current inventory levels using next quarter’s projected revenue, days of inventory at the end of the first quarter of 143 days was 9 days higher than at the end of the fourth quarter of 2024.
| Selected Balance Sheet and Inventory Data | (Unaudited) | |||
| Q1'25 | Q4'24 | Q1'24 | ||
| Cash, Cash Equivalents, and Short-Term Investments | ||||
| Operating Cash Flow | ||||
| Accounts Receivable | ||||
| Days of Sales Outstanding | 31 Days | 25 Days | 39 Days | |
| Internal Inventories | ||||
| Days of Inventory (current quarter revenue) | 146 Days | 138 Days | 175 Days | |
| Days of Inventory (next quarter revenue) | 143 Days | 134 Days | 159 Days | |
Q2’25 Business Outlook
For the second quarter of 2025 ending June 30, we are forecasting:
- Revenue in the range of
$640 million to$660 million . - GAAP gross margin in the range of
54.9% to55.5% . - Non-GAAP gross margin in the range of
55.2% to55.8% , which excludes the impact from stock-based compensation and related expenses as well as the impact from amortization of acquisition-related intangible assets. - Total stock-based compensation and related expenses in the range of
$58.3 million to$60.3 million including approximately$1.9 million that would be charged to cost of goods sold. - GAAP operating expenses between
$189 million and$195 million . - Non-GAAP operating expenses in the range of
$132.6 million to$136.6 million . This estimate excludes stock-based compensation and related expenses in the range of$56.4 million to$58.4 million . - Interest and other income in the range from
$6.2 million to$6.6 million before foreign exchange gains or losses. - Non-GAAP tax rate of
15% for 2025. - Fully diluted shares outstanding in the range of 47.9 to 48.3 million shares.
For further information, contact:
Bernie Blegen
Executive Vice President and Chief Financial Officer
Monolithic Power Systems, Inc.
408-826-0777
MPSInvestor.Relations@monolithicpower.com
Safe Harbor Statement
This earnings commentary contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including under the “Q2’25 Business Outlook” section herein, our statement regarding our business focus, our statement regarding the expansion and diversification of our global supply chain and the quote from our CEO and founder, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the second quarter of fiscal year 2025 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the various challenges facing our business, our industry and the global economic environment, revenue growth in certain of our market segments, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry segment trends and prospects, and our projected expansion of capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this earnings commentary and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued uncertainties in the global economy, including due to the Russia-Ukraine and Middle East conflicts, global tariffs and retaliatory measures, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, and tax laws or the interpretation of same, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of any continuing impact from the Russia-Ukraine and Middle East conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if its tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy, global tariffs and retaliatory measures, and geopolitical uncertainties, including the Russia-Ukraine and Middle East conflicts; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on March 3, 2025. MPS assumes no obligation to update the information in this earnings commentary or in the accompanying webinar.
Non-GAAP Financial Measures
This CFO Commentary contains references to certain non-GAAP financial measures. Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income, net, non-GAAP operating income and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, other income, net, operating income and income before income taxes determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation, net deferred compensation plan expense (income), amortization of acquisition-related intangible assets and related tax effects. Non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense (income). Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan income (expense). Non-GAAP operating income excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense (income). Non-GAAP other income, net excludes the effect of deferred compensation plan expense (income). Non-GAAP income before income taxes excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and net deferred compensation plan expense (income). Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, and amortization of acquisition-related intangible assets. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS. See the GAAP to Non-GAAP reconciliations in the tables set forth below.
| RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME | ||||||||
| (Unaudited, in thousands, except per share amounts) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income | $ | 133,791 | $ | 92,541 | ||||
| Adjustments to reconcile net income to non-GAAP net income: | ||||||||
| Stock-based compensation and related expenses | 53,811 | 51,769 | ||||||
| Amortization of acquisition-related intangible assets | 320 | 291 | ||||||
| Deferred compensation plan expense (income), net | (6 | ) | 47 | |||||
| Tax effect | 5,897 | (7,156 | ) | |||||
| Non-GAAP net income | $ | 193,813 | $ | 137,492 | ||||
| Non-GAAP net income per share: | ||||||||
| Basic | $ | 4.05 | $ | 2.83 | ||||
| Diluted | $ | 4.04 | $ | 2.81 | ||||
| Shares used in the calculation of non-GAAP net income per share: | ||||||||
| Basic | 47,851 | 48,635 | ||||||
| Diluted | 48,006 | 48,928 | ||||||
| RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN | ||||||||
| (Unaudited, in thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Gross profit | $ | 353,230 | $ | 252,441 | ||||
| Gross margin | 55.4 | % | 55.1 | % | ||||
| Adjustments to reconcile gross profit to non-GAAP gross profit: | ||||||||
| Stock-based compensation and related expenses | 1,706 | 1,900 | ||||||
| Amortization of acquisition-related intangible assets | 287 | 258 | ||||||
| Deferred compensation plan expense (income) | (163 | ) | 440 | |||||
| Non-GAAP gross profit | $ | 355,060 | $ | 255,039 | ||||
| Non-GAAP gross margin | 55.7 | % | 55.7 | % | ||||
| RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | ||||||||
| (Unaudited, in thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Total operating expenses | $ | 184,471 | $ | 156,954 | ||||
| Adjustments to reconcile total operating expenses to non-GAAP total operating expenses: | ||||||||
| Stock-based compensation and related expenses | (52,105 | ) | (49,869 | ) | ||||
| Amortization of acquisition-related intangible assets | (33 | ) | (33 | ) | ||||
| Deferred compensation plan income (expense) | 1,193 | (3,626 | ) | |||||
| Non-GAAP operating expenses | $ | 133,526 | $ | 103,426 | ||||
| RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME | ||||||||
| (Unaudited, in thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Total operating income | $ | 168,759 | $ | 95,487 | ||||
| Adjustments to reconcile total operating income to non-GAAP total operating income: | ||||||||
| Stock-based compensation and related expenses | 53,811 | 51,769 | ||||||
| Amortization of acquisition-related intangible assets | 320 | 291 | ||||||
| Deferred compensation plan expense (income) | (1,356 | ) | 4,066 | |||||
| Non-GAAP operating income | $ | 221,534 | $ | 151,613 | ||||
| RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET | ||||||||
| (Unaudited, in thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Total other income, net | $ | 5,131 | $ | 9,540 | ||||
| Adjustments to reconcile other income, net to non-GAAP other income, net: | ||||||||
| Deferred compensation plan expense (income) | 1,350 | (4,019 | ) | |||||
| Non-GAAP other income, net | $ | 6,481 | $ | 5,521 | ||||
| RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES | |||||||
| (Unaudited, in thousands) | |||||||
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| Total income before income taxes | $ | 173,890 | $ | 105,027 | |||
| Adjustments to reconcile income before income taxes to non-GAAP income before income taxes: | |||||||
| Stock-based compensation and related expenses | 53,811 | 51,769 | |||||
| Amortization of acquisition-related intangible assets | 320 | 291 | |||||
| Deferred compensation plan expense (income), net | (6 | ) | 47 | ||||
| Non-GAAP income before income taxes | $ | 228,015 | $ | 157,134 | |||
| 2025 SECOND QUARTER OUTLOOK | ||||||||
| RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN | ||||||||
| (Unaudited) | ||||||||
| Three Months Ending March 31, 2025 | ||||||||
| Low | High | |||||||
| Gross margin | 54.9 | % | 55.5 | % | ||||
| Adjustment to reconcile gross margin to non-GAAP gross margin: | ||||||||
| Stock-based compensation and other expenses | 0.3 | % | 0.3 | % | ||||
| Non-GAAP gross margin | 55.2 | % | 55.8 | % | ||||
| RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | ||||||||
| (Unaudited, in thousands) | ||||||||
| Three Months Ending March 31, 2025 | ||||||||
| Low | High | |||||||
| Operating expenses | $ | 189,000 | $ | 195,000 | ||||
| Adjustments to reconcile operating expenses to non-GAAP operating expenses: | ||||||||
| Stock-based compensation and other expenses | (56,400 | ) | (58,400 | ) | ||||
| Non-GAAP operating expenses | $ | 132,600 | $ | 136,600 | ||||
FAQ
What were MPWR's Q1 2025 earnings per share?
How much revenue did Monolithic Power Systems generate in Q1 2025?
What is MPWR's revenue guidance for Q2 2025?
Which were MPWR's best-performing segments in Q1 2025?
What was Monolithic Power Systems' cash position in Q1 2025?
