MPWR

Let’s dig into the relative performance of Monolithic Power Systems (NASDAQ:MPWR) and its peers as we unravel the now-completed Q2 analog semiconductors earnings season. Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years. The 14 analog semiconductors stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 4.9% above. While some analog semiconductors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.8% since the latest earnings results. Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ:MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption. Monolithic Power Systems reported revenues of $980.6 million, up 47.6% year on year. This print exceeded analysts’ expectations by 8.6%. Overall, it was an incredible quarter for the company with a significant improvement in its inventory levels and a beat of analysts’ EPS estimates. “Our results demonstrate the strength of our diversified model and our continued success in transforming from a chip-only, semiconductor supplier to a full service solutions provider,” said Michael Hsing, CEO and founder of MPS. Monolithic Power Systems pulled off the biggest analyst estimate beat, highest guidance raise, and fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 1.2% since reporting and currently trades at $1,301. Read why we think that Monolithic Power Systems is one of the best analog semiconductors stocks, our full report is free. Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ:PI) is a maker of radio-frequency identification (RFID) hardware and software. Impinj reported revenues of $108.4 million, up 10.7% year on year, outperforming analysts’ expectations by 3.5%. The business had a stunning quarter with a significant improvement in its inventory levels and a beat of analysts’ EPS estimates. The market seems happy with the results as the stock is up 20.6% since reporting. It currently trades at $168. Is now the time to buy Impinj? Access our full analysis of the earnings results here, it’s free. Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones. Himax reported revenues of $227.4 million, up 5.9% year on year, exceeding analysts’ expectations by 2%. Still, it was a slower quarter as it posted EPS in line with analysts’ estimates. Interestingly, the stock is up 1.5% since the results and currently trades at $13.55. Read our full analysis of Himax’s results here. Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices. Vishay Intertechnology reported revenues of $888.6 million, up 16.6% year on year. This number missed analysts’ expectations by 1.8%. More broadly, it was actually a strong quarter as it produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ operating income estimates. The stock is down 19.3% since reporting and currently trades at $31.35. Read our full, actionable report on Vishay Intertechnology here, it’s free. Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ:ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices. Analog Devices reported revenues of $4.02 billion, up 39.6% year on year. This print surpassed analysts’ expectations by 2.6%. Overall, it was a very strong quarter as it also produced revenue guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ operating income estimates. The stock is flat since reporting and currently trades at $373.95. Read our full, actionable report on Analog Devices here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Monolithic Power Systems has delivered a very strong 186.1% total return over the past five years, yet its current checks lean expensive and raise questions about how much optimism is already in the share price. Over the last 5 years, Monolithic Power Systems has returned 186.1%, which puts recent valuation concerns in the context of a long period of strong shareholder gains. Investor expectations for AI related data center and storage demand can support optimistic assumptions for future growth, while ongoing legal investigations into alleged false statements and potential breaches of fiduciary duty may weigh on how much investors are willing to pay for that story. The company scores 1 out of 6 on the broader valuation checks, which points to a stock that currently leans expensive rather than a clear bargain. For investors, the debate is whether Monolithic Power Systems' recent price level is already reflecting the AI data center opportunity given the low valuation score and the legal and governance questions now in play. Monolithic Power Systems delivered 62.5% returns over the last year. See how this stacks up to the rest of the Semiconductor industry. The P/E ratio is a useful way to see how much you are paying for each dollar of Monolithic Power Systems earnings today. On this measure, the stock trades on about 81.7x earnings, which is well above the Semiconductor industry average of 53.6x and also higher than the peer group average of 67.1x. The tailored fair P/E ratio for Monolithic Power Systems is 36.9x based on factors such as its growth profile, profitability, size, and risk. That is less than half of where the stock currently trades, which suggests a rich valuation even before considering the current legal investigations into alleged false statements and potential fiduciary breaches. The gap between the current multiple and this fair ratio indicates that investors are already paying a premium for the AI data center narrative and the recent strength in earnings. On the P/E multiple, Monolithic Power Systems stock currently appears overvalued compared with both its own fair ratio and typical peers in the Semiconductor industry. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Monolithic Power Systems are designed to bridge this valuation puzzle and clearly show which assumptions about future growth, margins and earnings would need to hold for the stock to be worth materially more or less than today's price on the Community page. Each narrative links its number to a specific view on how Monolithic Power Systems' growth, profitability and risks could evolve, which you can revisit as new information is released. One of the top community narratives on Monolithic Power Systems: 26% undervalued Read one of the top narratives on Monolithic Power Systems Do you think there's more to the story for Monolithic Power Systems? Head over to our Community to see what others are saying! For Monolithic Power Systems, the current valuation screens as overvalued on earnings based on the tailored fair P/E range and peer comparisons. That does not rule out further gains, but it means you are paying a clear premium for the AI data center narrative and for execution to stay strong. The crux of the debate now is whether future growth and margins can be robust enough to support that premium, especially with legal and governance questions still in the background. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MPWR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, July 30, 2026 at 5:00 p.m. ET Chief Executive Officer and Founder - Michael R. Hsing Vice President, Finance - Tony Balow Operator: Good day, and thank you for standing by. Welcome to Monolithic Power Systems Inc. Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is ready. Please be advised that today's conference is being recorded. Now I would like to turn the conference over to Arthur Lee to read the Safe Harbor statement. Please go ahead. Arthur Lee: Earlier today, MPS released a written commentary on the results of its operations for the second quarter ended 06/30/2026. This document can be found on our website. Before we begin, I would like to remind everyone that in the course of today's presentation, we may make forward looking statements and projections within the meaning of the Private Securities Litigation Reform Act of 2000 that involve risk and uncertainties. The risk, uncertainties, and other factors that could cause actual results to differ from these forward looking statements are identified in the safe harbor statements contained in the Q2 26 earnings commentary and in our SEC filings, including our Forms 10-K and Forms 10-Q, which can be found on our website. Our statements are made as of today, and we assume no obligation to update this information. Now I would like to turn the call over to Tony. Tony Balow: Thanks, Arthur. Good afternoon, and welcome to our Q2 26 earnings call. In Q2, MPS achieved record quarterly revenue of $981 million 22% higher than the first quarter of 26 and 48% higher than the second quarter of 25. Our performance was a result of our continued innovation, our consistent and the resilience of our diversified market strategy. Let me take a few moments to call out a few of the highlights from the quarter. All end markets grew sequentially with enterprise data growing 45% as we continue to see strong broad based ordering patterns. We extended our capacity goals significantly beyond $6 billion to support future revenue growth and our transformation into a full solution provider. We received initial orders for high speed DDR5 memory we expect to grow our SAM into next year. We began sampling high voltage AC-to-DC products for 800-volt data center architectures as an expand beyond our current AI and server core power solutions. And finally, in our automotive market, so far this year, we have shipped products over 1.5 thousand new sockets as we increase our footprint in both ADAS as well as in other applications within the vehicle. Overall, while we continue to adjust for the fluid geopolitical and macroeconomic environment, our diversified market strategy remains unchanged. MPS focuses on innovation and solving our customers' most challenging problems. We consistently invest in new technologies that open new end markets and applications and accelerate our transition from chip only to a full service silicon solution based provider. And finally, we continuously expand and diversify our global supply chain allowing us to capture future growth opportunities, maintain supply stability, and rapidly adapt to market changes as they occur. Before moving to Q&A, I am also pleased to announce that our Board of Directors has authorized an additional $500 million for stock repurchases increasing our total current authorization to $1 billion. Operator, you may now open the webinar for questions. Operator: Ladies and gentlemen, to ask a question at this time, you will need to press. Please stand by while we can call the county roster. And our first question coming from the line of Rick Schafer with Oppenheimer. Your line is now open. Rick Schafer: Thank you, and congrats on the beat you raised you guys. I guess I have to ask about capacity, Tony. Communications was up 80% I think last quarter, it was up about 50% if memory serves. that is a pretty big step up. You know, I am just curious. Is that mostly transceiver power, or are you seeing meaningful contribution now from the other, the other sockets of Switch, DPUs, SmartNIC, I mean, does that kick in? Is that helping drive that? And then any color you can give on how the second half sets up. I mean, is that momentum continues to grow into Q3? Michael R. Hsing: Yeah. We see I reckon that we see a lot of growth. And a lot of demand. Modules, chips, and we see from multiple of our customers. And Tony, do you want to have the detail? Tony Balow: Yeah. I will just add a little more color. Rick, you do see contribution from both optical modules solutions as well as from what we generally bucketed as switches. As I think as I have mentioned previously, that is that is kind of a big bucket that would including power solutions for not only top of rack switches, but TPUs, NIC cards, and other things in the rack. So you are starting to see that grow as well. Optical is still with a bigger portion just because it is had a longer runway since last year, but you are seeing growth from both of those really driving the comms end market. Rick Schafer: Okay. As soon as my follow-up. I am just curious. I mean, I believe you are shipping 48-volt vertical power modules to a couple customers now. And I do not know if you could update us on that. I mean, do you expect to add any more this year? Maybe a sense of what your expectations are for 48-volt vertical power mods, in terms of maybe the mix versus VR this year? Or next year? How do you want to couch it? Thanks. Michael R. Hsing: it is more than a couple of customers. Okay. And we see new customers that were coming online. So okay. We start to ship. Yeah. Tony Balow: I think over the long term, as power requirements continue to increase across our end markets, Rick, we have talked about the fact that modules and solutions will increasingly be an important part of our business. So I think you will see that trend continue over the next couple of years. Rick Schafer: Thanks, you guys. Operator: Our next question in queue coming from the line of Joshua Buchalter with TD Cowen. Your line is now open. Joshua Buchalter: Hey, guys. Thank you for taking my question, and let me echo the congrats on the fantastic results. Maybe to start, I mean, you gained nearly $120 million in the data segment in 1 quarter, which is pretty astounding. Can you walk through the drivers of that upside and growth? And I think importantly, you have the inventory dynamics play out a couple of years ago. Can you speak to your confidence that there is no inventory building here and the overall visibility in that segment Thank you. Michael R. Hsing: Thanks for remembering last couple of years. We have all these shortages in the industry. We pull it off. Okay? Thanks for remember that. We will continue to there is no reason not to believe we are we are not we are we are not pro pulling off. Although it is very difficult. Okay? I mean, but we are going to make it happen. Tony Balow: Yeah. And I will just add if you look at kind of the underlying growth drivers for that particular end market, they really have not changed from what we have talked about. You know, we have talked about ramping existing customers, ramping new customers, seeing the module content increase, per Rick's question previously. Deming platform refreshes that drive content, then, of course, CPU. And we saw all that was very strong in Q2. And I think since you are kind of talking about the sustainability of that, there is probably a couple of different ways, additional Michael said. I always start channeling and inventory. is 1 indicator, and that remains very low. So we believe that is continuing to sell through. Over time. And I think right now, based on what we can see, we are willing to raise floor for that particular end market from 85% for the year to 130% for the year. Michael R. Hsing: Yeah. I want to add in this enterprise data centers, and then it is relatively new. And we start to see these significant business about 2-3 years ago 3 years ago. Starting. And we do not have any concentrated customers. And pretty much, we engage from a large to small. And where you see the revenue happen now. And it will continue that way in the in the next year. Joshua Buchalter: Thank you both for all the color. I will take the hint and not ask about AI servers again. That said, I guess, we feel very much. Yeah. I was like, great. Thank you. So yeah. I know your policies, Michael. You know, it is great to see the initial orders for the DDR5, high speed interface controller. You know, you mentioned that could be SAM-expansive. Can you maybe help us with how much And it does seem like a quite a new capability for monolithic Are there other applications that you could use this technology for that beyond memory controllers as well? Thank you. Michael R. Hsing: Yeah. Yes. This is a new to us. This is a high-speed, very high speed into the gigahertz. Kind of things. And, again, in a very precision. Okay. And pretty much the analog. Circuitry. And we can expand the technology to other communications. And, once we have established a know how. So that is a very-- these are a true fundamental know hows. And, okay, and other business, we want to get this 1 to launch it first. And then we will migrate to other applications. Yeah. Operator: In terms of the second part of your question, which was how expansive it could be, I would still say we are very much early innings. Tony Balow: We want to prove ourselves in this particular market. I think it is too early for us to call any kind of revenue ramp on our side. We are just signaling that we continue to run our playbook and look for new sockets out there that can expand overall SAM over time. Michael R. Hsing: But in the history, when we are mentioning something, it will take you into a revenue. Yep. Joshua Buchalter: Thank you both, and congratulations again. Operator: Our next question in queue coming from the line of Tore Svanberg with Stifel. Tore Svanberg: Yes. Thank you. Let me echo congratulations for another record quarter. How should we think about the segments for Q3? I mean it sounds like all markets are growing right now. But just wondering on a relative basis, could give us some color on each segment into Q3. Michael R. Hsing: Well, I know the oil market-- maybe Tony can point out some of the not so good ones. Okay. I think the consumer 1 where we are kind of still lagging because of all the efforts that we focus on it. And the consumer market, it does not mean we give it up. Okay? And we will continue a very diversified way of growing our business. And, as we talk as I talk, talk about it in the past, NPS is transitioning from a chip company, a semiconductor company to be a semiconductor-based solution providers. With our solutions. And so other segments that I can and automotive con continue to grow. So, okay, other ones, the communication side will continue to grow. So, like, and industrial's kind of lagging a little bit. And that came in-- that does not mean we are defocusing. Tony Balow: Yeah. And I will just add a little bit. I think the story is going to feel pretty similar You are certainly being led by the data-centric businesses, with enterprise data and comms, of course, leading the pack. I think industrials could grow a little bit with the market, but again, we primarily said that is a design win type year for us this year where we continue to pile up additional sockets that will turn into revenue in the future. Think the areas that we are cautious on are the ones Michael had pointed out and then we said this last quarter as well, consumer being 1. And then I think the notebook side of storage and compute will continue to remain cautious on that 1 as we go into the second half. Tore Svanberg: Yes. that is great color. As my follow-up, you mentioned you are now sampling the 800-volt solution. When should we expect to see some revenues from Monolithic Power there? And are these products based on silicon GaN and silicon carbide, or is it 1 or the other? Thanks. Michael R. Hsing: We have a well, in the past, Tony, you know, I will openly say, I do not believe GaN. And now I think I was proven wrong. But it is up to a point where we cannot ignore GaN. And we think last year, we developed our own GaN, and we will have a working device. And in terms of 800-volt solution, we totally rely on NPS silicon carbide device. And revenue wise, probably, you will know you will know, and I gave me and all the market will know. And, okay, where the data center transition happened? When that happens, and we will have the revenues. In terms of the wins, again, then we do not know. We know as much as you know. Great. Tore Svanberg: Thank you very much. Congrats again. Thank you. Operator: Our next question coming from the line of William Stein with Truist Securities. Your line is now open. William Stein: Great. Thanks for taking my question. I want to add my congrats to the fantastic results and outlook. I am wondering if you could talk about whether pricing meaningfully influenced the sequential growth or the outlook in Q3? Michael R. Hsing: Yes. Yes. I know what you mean whether we increase price or not. And we do not NPS never gouges prices when the supply chain is tight. And we want to build a consistent model where we execute consistently within our models, And when supply chain is tight and raise the price, how about a way over the way we reduce the price? We do not. And we operate in a consistent way. And our customers appreciate that. So in terms of whether due to the price increase, definitely, it is not. it is all products. Yeah. Tony Balow: The only thing I would add to that at all is for us on pricing, it is very consistent to Michael's point. We have raised some prices, but it is primarily been in kind of 1 of 3 areas in general, right, where we have seen input costs go up, to make sure that we do not get diluted on the margin line. Where people are asking for expedites, because obviously that can influence our own supply chain and then finally, where people might be asking for specific supply chains outside of China, which can be naturally more expensive. So maintain a very consistent approach to what you have heard previously as we look at our pricing. William Stein: that is really helpful. Michael, I want to shift for a second to some things that I think are closer to your interests, some of the smaller but emerging growth opportunities like robotics, humanoid robotics, and home automation or building automation. Can you talk about your traction in those 2 emerging-- and they are of interest to us? Michael R. Hsing: I am speaking. A million square feet building is installing our building controls. But I have to tell you, it is like we are still lagging of the software. The hardware is all done. And with some minor revisions, and, like, I may not have-- but the software is the key, the ease of use. And how we implement it. And by the end of this year, we should be able to complete everything. And there is a multiple of our customer-- it is not our customers. In that case, the potential customers they are waiting for us to install in their building. And I am looking at that when I am in the market segment, but we are looking at this opportunity and to my surprise, it is about $40 billion to $50 billion. And the MPS has all the key product and the and the technology. The software is what we were building. And that is again, you exactly talking about my topics that I am working on. The other 1 is the robotics. Again, robotics. Okay. there is a lot of-- there is, especially, a lot of Chinese companies show a lot of entertainment and we will see. And, we have all our design-in solutions. Okay. They all happen in the US side and also the China side. Okay. And they are all using NPS solutions. And now the next question is, okay, how are we going to-- where the robot is going to be used? And from our own factory, and this is not humanoid. Robot. We use our own product to, to improve, especially the modules. Production not the production, the testing. And also the reliability test. And we use our own motion controls and the robotics. Again, and it is the same as the equivalent to a robot. And to make all these things happen. And, our customers are actually our suppliers. to our own automation. They will use those solutions sell it everywhere else. Thank you. William Stein: Thank you. Operator: Our next question in the queue coming from the line of Quinn Bolton with Needham and Company. Your line is now open. Quinn Bolton: Hey, guys. I will offer my congratulations as well. Tony or Michael, I wanted to come back to the optical transceiver part of the business, since I think that is the biggest part of comms. Can you just sort of discuss what you are seeing on the competitive landscape Is competition mostly PMICs? Is it mostly discrete DC-to-DC converters from folks like TI or analog devices? And then can you give us any sense what you think your share might be for power management within those optical transceivers? And then I have got a follow-up. Michael R. Hsing: that is a very boring topic. Okay. that is over the last few years, we talked about power modules. Okay? I think that you realize those very early on. And, okay, I mean, it is more than 5 years ago now. And we have these power modules. And very high power density modules. And These are encapsulated modules. And since we have the highest power density ICs and we integrate fully integrate it each of these module with the inductors. And with all the capacitors and it is a total power solution, plug-in power solutions in a very small form factor. And I said with a straight face, we are the highest-power-density company in the world now. And I do not know about optical, market segment as long as I know we provide the best power density we will win all these sockets and including optical modules. Tony Balow: As the share comment goes, obviously, we will not talk about specific customers. But certainly, I think if you look at the overall market, there is still room for us to grow. And I think just net of both the TAM growth and share, I think it can actually be a primary growth driver in the comm segment going forward. I do not think we can actually quote the exact percentage of share at this time. Quinn Bolton: Okay. But you certainly still see share gain opportunities in that market, sounds like? Tony Balow: Yes. I think at some customers, we would see additional opportunity to gain share in some of the sockets. But I think the net of this is that within the comm segment between TAM and share, there is still a very substantial growth opportunity ahead of interest to us? Quinn Bolton: Great. And then I guess just coming back to the capacity support, in the past, I think when you went from $2 billion to $4 billion you talked about the incremental capacity largely coming from outside of China. As you have now built capacity up to and beyond $6 billion. Can you give us some sense what the geographic split of that capacity is? Is it fairly balanced between China? And non China? Does it lean 1 way or the other? Michael R. Hsing: it is not settled down yet. We now can do it depending on what our customers' requirements. Okay. At this time, wherever the all we need, it goes. Okay. And wherever we can provide a product, they will buy. Okay. And but we built a very balanced approach. And what is the percentage in the end? Okay. it is hard. it is difficult to call now. Tony Balow: The only thing I would add on that is, you know, when you just call a total number, it sometimes gets lost in the detail, but I think we have been increasingly focused not just on the foundry side of business. But also the back end part of the business because as Michael alluded to, modules and solutions will become increasingly important. And so that is actually more complicated back end process as well. So as we look to bring out new partners and look to bring them on in a geographically balanced way, that goes for both the front end and the back end. Quinn Bolton: Understood. Thank you. Michael R. Hsing: Yeah. Especially, yeah, especially our module assembly. it is more difficult. it is a 3D effect. it is more complicated than the assembly of a phone even. And so it requires a lot of experiments and then a lot of know-how. You know, to getting all these modules. And so we now, so, like, expand to and, anyway, in a way that we will find these equipments and these capability to make it happen. Quinn Bolton: Thank you. Operator: Our next question coming from the line of Joseph Quatrochi with Wells Fargo. Your line is now open. Joseph Quatrochi: Yeah. Thanks for taking the questions. Was wondering if maybe you could just kind of give us an update on how you are thinking about automotive demand in the second half of this year? You talked about 1.5 thousand new design sockets year to date. How should we think about the ramp-up revenue from those new wins as well? Tony Balow: Yeah. I think Yeah. I think the year is still playing out pretty much as expected. And just to repeat what you said in the past, we thought the first half would be flat with the second half ramping up. And I think we feel pretty comfortable with that second half overall ramp. I think we land on a year over year basis, we are still thinking the end market can be in the mid teens kind of year over year. The 1 thing about the ramp that gives us additional confidence is that it is very broadly based. it is not isolated to 1 or 2 customers for what Michael was talking about and so the diversification that we look for in all of our end markets right now. They called out the 1.5 thousand specifically to show that is not just very much focused on ADAS, which has been a historical strength for us. But we continue to see it broadening out in the portfolio for other sockets in the vehicle. Michael R. Hsing: Yeah. Yeah. We are focused on things like zonal, the 48-volt systems. And also, we address the battery side. Okay? and LiDAR, and so these are the emerging market. And or emerging requirements from automotive. I think that, in the next few years, they all will be okay. And installed in the car, it will see very popular. And on the market. and we will always see MPS revenue growth. Joseph Quatrochi: Thanks for that. And then as a follow-up, I think last quarter, you talked about your plans to enter the RCD market. And starting to sample with customers? Just curious. Any update in terms of how that is going? Michael R. Hsing: We are sampling. Okay. And we are still developing. And a lot of new product. And is a very new to us. And but we are confident that we will be turned into revenue. Although, we have some revenue now. Okay. Yeah. Tony Balow: I Yeah, just to keep it from a model basis, you know, we have that is not going to be a needle mover in 2026 for us. Right, in terms of revenue. Yep. Joseph Quatrochi: Thank you. Operator: Our next coming from the line of Christopher Caso with Wolfe Research. Your line is now open. Chris Caso: Thank you. Good evening. I guess the first question is an update on where CPU server power stands right now. I know that you guys have gained a lot of share over the years on that. That market is heating up because of the Gen 6 CPU. So how impactful has that been to the ED segment? And where do you see that going as you go into the end of the year into next year? Tony Balow: Yeah. Thanks, Christopher. Let me start, and then Michael and Robert can jump in as well. I think 1 of the things is we have been talking about it for close to a year that CPU has been 1 of the growth drivers for us in enterprise data. So it is it is something that has been and I think will continue to be part of the overall growth story. To the extent that Gen 6 AI drives further CPU growth, that will continue to be a tailwind for us. As you know, it is difficult for us to separate sometimes a pure AI sale from a CPU sale. So it is a little difficult for us to parse those specifically. But if we start to see some of the forecasts come to play that you have seen from some of those in industry, we think that could be, you know, an additional growth factor for us even going forward. From a share perspective, again, I think we will probably pass on specific share. I think we are very broadly indexed across both x86 and ARM players. And so no matter who sort of wins in that race, we think we can participate. Operator: I think I answered your question 1 time in terms of the-- okay. Michael R. Hsing: What is the percentage at the time? In the CPU side, we want to get in the CPU market segment. Think that what I was asked to know what the share-- market shares. We want to be. Okay. I mentioned it in earnings calls that if it is lower than 30% I call it a failure. Okay. I think that we are comfortable with it now. So we are past that. And that is where the good position we are in. Now. And then we will continue that. Thank you for that. Chris Caso: As a follow-up, maybe a bit of a longer term question. And maybe as we look out, you know, say, over the next, you know, 2 years, 2 plus years, do you still expect that I mean, enterprise data has been the fastest growing part of your business because it has been the fastest end market. Do you expect that to continue to be the case? And, you know, I know, Michael, you like to run a diversified business. But, you know, that end market is just growing so quickly. So I guess maybe the question is, is the growth in that end market and enterprise data going to make it more difficult to diversify the business. Michael R. Hsing: Good question. Okay. And we never focus on any market segments. And we provide picks in the shovels and the blue jeans. And, as long as we are making the best of it, we will win those segments. And, so we are not really a gold diggers. Okay? Be asking us to find out the empty mountains and okay. But we do not do that kind of things. And we just provide the basic best elements for other people to succeed at it. And 1 time, automotive was big. 1 and other times, like consumer was big. And we learn from our customers. We let the market demand. to decide that. As long as we focus on the fundamental development, I think that we will win in the very long term. And a clear example was a couple of years ago, it is in a-- the AI is not gaining and went sideways or enterprise data go went sideways, even dropped slightly. And that year, all the other business grow tremendously, like including automotive. And that is exactly what we wanna see and okay. And we have a we want to provide to our investors a very consistent way of growing MPS. Tony Balow: I mean, even this last Q2, right, outside of enterprise data, the rest of the businesses saw double digit growth. So I understand your comment on what TAM might be growing faster, but you can see you are still seeing pretty substantial growth outside of ED. Chris Caso: Thank you. Operator: Our next coming from the line of Kelsey Cha with Citi. Your line is now open. Kelsey Chia: Hi. Good evening. So based on the strong and broad based ordering patterns guys have, I am wondering how much visibility do you have in the enterprise data end market? And I was wondering if you can provide any color as to how the 2027 outlook could look like based on the design wins, visibility, expected product ramps, or elaborate on any incremental revenue opportunities and ramp within that segment? Tony Balow: Yeah. I will start on that 1. And I think in general, 2027 is a bit far away. We are still trying to land 2026. But I think if you to answer the first part of your question and the visibility, again, the longer term ordering patterns that we saw begin even late last year have really maintained. And our book to bill this cycle was again well above 1, So we do have, you know, more than a quarter type visibility like we were dealing with maybe midway through 2025. That does not mean we necessarily have visibility all the way out to the end of 2027, though. But I think the way I would address it is I think the underlying structural growth drivers have not really changed. Right? We have best of breed from a current density and modules you see more and more of our end markets adopting those high current density modules for their applications. And we continue to win new sockets. So I think our ability to continue to grow into 2027 is still structurally very sound. I think it is too early to put a number on it. Michael R. Hsing: We well, here is a the true demand. Is determined by the market. And we do not want our customers to end it up in a lot of wasteful inventory. At the same time, we will watch us. Okay. Our own inventory. We will end up a lot of a lot of inventory with we cannot sell. So we clearly balance that. And what is the forecast We do not do them. Okay. Even though we have a NCNRs. Okay. And we shovel into our customer's throat. That there is a bad relationships. And our relationship is very long term. And so it cannot and although the order booking is very good, as a as Tony said it. Okay. But we do not see the business in that way. And we do things swiftly according to our customer demand. Kelsey Chia: Got it. And, also, with such strong revenue outlook, could you help us think about gross margins and OpEx trajectory? It seems that you guys are lending somewhat below your long term OpEx guidance right now. Michael R. Hsing: We are in the models. And we are still in the models, although in the low end. My-- I said I was-- I will be heavier, so we are higher. I was not-- I said I was not happy. And look at this. We focus on grow growing the revenue and growing the net profit. EPS that is the key reason. The other 1 is nobody wants us to have a high gross margin. for less of a-- lack of a growth. Nobody wants us to do that. And our shareholder does not want us to do that certainly. Okay? And so we focus on this. It will be-- gross margins, I said that we will figure out, you know, we will grow higher. Certainly, it is not in the near future, as well. They will stay similar or maybe slightly higher. Robert W. Dean: Hi, Kelsey. This is Robert. I will add to what Michael was saying and I will add on to what Tony was saying about the strong order levels which continued into Q2. Gave us the ability to incrementally expand our guidance on gross margin again just slightly, but it is there. So as Michael said, we are at the low end of where we want to be, but we are feeling comfortable about where we are at for Q3. Operator: And, Kelsey, the last part of your question was a little bit on OpEx. Tony Balow: And I think in general, we have not changed any of our thesis around how we are trying to invest for the future. I think what you see is when you get to higher levels of revenue, it is difficult to keep the levels of spending up to that model. And so you see some additional leverage as you pull through to operating margin. And I think you have seen pretty healthy expansion in operating margin over the past couple of quarters. Kelsey Chia: Got it. Thank you. Operator: Our last question will come from the line of Sebastian Naji with William Blair. Sebastian Naj: Yeah. Thanks for taking the questions, and congrats on a great quarter here. it is great to see the momentum across the business. AI data center is clearly a strong tailwind for the enterprise data business, also in communications. A little bit even in storage and compute. I mean, if I start to add up all these segments, you are you are looking at data center exposure that is approaching roughly 50%. I mean, is that the right way to think about it across your different end markets? Tony Balow: I think you are picking the right components as you go in there. Right? Obviously, the optical module business, the switch business can be pulled to the data center, all of enterprise data. Then, remember inside of storage, you really kind of have 3 big sub buckets. DDR 5, HDD, and SDD. HDD and SSD, I think, over time, are becoming increasingly focused, whereas at 1 point, you know, they might have been more consumer based. We have not broken out, you know, storage and compute versus notebook. In there, but I think you are picking the right components as you look at those things that could ride some of the of the healthy demand pull-through from the data center right now. Sebastian Naj: Okay. Great. And maybe just as a quick follow-up on the incremental supply capacity that you are bringing online. Is any of that on newer node processes, like 40-nanometer, or is that mostly on existing 65-nanometer solutions? Michael R. Hsing: I think it is mostly the existing. So, like I have-- this same thing we are talking about for some time now, we have an increase in capacity. Again, Tony said this is not only about the silicons and the wafers. Okay? We are building a lot more, we are building systems. And that changes the complexities of the buy silicon only. I mean, we have been on this journey for-- since 2017. And all the procurement and the qualification component called qualification, we have become mature. And now it is not-- we have to pull some more new tricks in the next year or so. to increase all these capacities. Okay. Right. Would you say it is the worst or the hardest to increase capacity? Over the last 10 years that you see? it is it is different periods, different times, and, okay, and the qualified vendors. Okay, and in the silicon side, we have a lot of experience. And again, you move up onto a system. How you assemble all these sys-- all these systems. And how you qualify all these vendors and how you are going to take the-- UL is a completely different model. That we have to operate on it. And we became I would say that we became a lot more mature, and there is a lot more room to go. A lot more improvement. To go. Sebastian Naj: Got it. Great. Thank you so much. Thank you. Operator: And I am showing there are no further questions in the queue at this time. I will now turn the call back over to Tony Balow for any closing comments. Tony Balow: All right. Thank you, operator. Thank you all for joining us for the conference call today. We look forward to speaking with all of you for our next call for our third quarter 26 results. Thank you again and have a nice day. Operator: This concludes today's conference call. Thank you for your participation. And you may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Monolithic Power Systems. The Motley Fool has a disclosure policy. Monolithic Power Systems (MPWR) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Monolithic Power Systems, Inc.? Here are five stocks we like better. Record growth led by data centers: Q2 revenue reached $981 million, up 22% sequentially and 48% year over year. Enterprise data revenue rose 45% sequentially, prompting MPS to raise its full-year enterprise-data growth floor to 130% from at least 85%. Capacity and product expansion: MPS received initial orders for DDR5 memory components, began sampling power products for 800-volt data centers, and expanded supply plans to support more than $6 billion in revenue. Automotive growth, robotics and building automation provide additional opportunities, while consumer markets remain more cautious. Profitability and shareholder returns: Strong orders supported a slight increase in gross-margin guidance and greater operating leverage, although margins remain near the low end of the target range. The board added $500 million to its buyback authorization, bringing the total to $1 billion. Monolithic Power Systems: AI Stock Beat, Raised and Upgraded Post-Earnings Monolithic Power Systems (NASDAQ:MPWR) reported record second-quarter revenue of $981 million, up 22% sequentially and 48% from a year earlier, as growth across its end markets was led by enterprise data and communications. VP of Finance Tony Balow said enterprise data revenue increased 45% from the first quarter, supported by broad-based ordering patterns, customer ramps, higher module content, platform refreshes and CPU-related demand. The company raised its full-year growth floor for the enterprise data business to 130%, compared with its prior expectation of at least 85% growth. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Monolithic Power Systems Is Surging—Has Valuation Caught Up? “Our channel inventory is one indicator, and that remains very low,” Balow said, adding that the company believes inventory continues to sell through. He said order levels remained strong, with book-to-bill again “well above 1,” giving the company more than a quarter of visibility, though not visibility through the end of 2027. Communications revenue rose 80% year over year, according to analysts on the call. Balow said the segment’s growth reflected contributions from both optical-module power solutions and a broader switching category that includes top-of-rack switches, TPUs, NIC cards and other rack-level applications. → Microsoft Just Flipped the AI Spending Narrative Overnight Insiders Are Selling These 3 Stocks—Here’s Why Optical-module solutions remain the larger portion of the communications opportunity because they have had a longer growth runway, Balow said, but switching-related demand is also increasing. He said the company sees further opportunities to gain socket share while benefiting from growth in the underlying market. Chairman, President and CEO Michael Hsing emphasized MPS’s module capabilities, describing the company’s products as integrated power solutions that combine its power-management ICs with inductors and capacitors in compact form factors. He said MPS is increasingly expanding from being a chip supplier to a semiconductor-based solutions provider. → Carrier Earnings Could Send the Stock to a New All-Time High The company also said CPU server power has remained a contributor to enterprise-data growth. Balow said MPS is broadly positioned across x86 and Arm customers and could benefit if demand for CPUs rises further with the adoption of agentic AI. Hsing said the company’s CPU market share is now comfortably above the 30% level he had previously identified as a strategic benchmark. MPS said it received initial orders for high-speed DDR5 memory components, a product area that could expand its addressable market beginning next year. Hsing said the DDR5 interface controller is a new capability for the company involving high-speed analog circuitry operating in the gigahertz range. While management did not provide a revenue forecast for the DDR5 products, Balow said MPS is in the early stages of proving itself in that market. Hsing said the technology and know-how developed for the memory-controller application could eventually be extended into other communications applications. The company also began sampling high-voltage AC-to-DC products for 800-volt data-center architectures. Hsing said the 800-volt solution currently relies on MPS’s own silicon-carbide devices. He added that the company has also developed its own gallium-nitride devices since last year, though he did not provide a timing forecast for an 800-volt data-center transition or related revenue. Management said it extended its supply-capacity plans significantly beyond $6 billion in revenue support. The expansion involves both front-end wafer capacity and more complex back-end assembly processes needed for modules and system-level solutions. Hsing said module assembly is more complicated than traditional semiconductor packaging and requires specialized equipment, vendor qualifications and manufacturing expertise. Balow said the company is seeking a geographically balanced supply chain, though management did not specify the eventual split between China and non-China manufacturing capacity. In automotive, MPS said it has shipped products for more than 1,500 new sockets so far this year. Balow said the company expects the automotive business to be flat in the first half before increasing in the second half, with the overall end market potentially growing in the mid-teens year over year. The new automotive sockets extend beyond the company’s historical strength in advanced driver-assistance systems, management said. Hsing cited zonal architectures, 48-volt systems, battery applications and LiDAR as emerging opportunities that could gain wider adoption in coming years. Management said industrial markets could grow modestly but remain primarily a design-win opportunity in 2026. It was more cautious on consumer markets and notebook-related storage and compute demand in the second half. Hsing also discussed building automation and robotics as longer-term opportunities. He said MPS hardware is being installed in a one-million-square-foot building-control deployment, while the company continues to develop software intended to improve ease of use and implementation. He said MPS expects to complete the necessary software work by year-end. In robotics, Hsing said the company’s motion-control and power solutions are being used by customers and in MPS’s own factory automation processes. Management said pricing did not materially drive the company’s sequential growth or outlook. Hsing said revenue gains were product-driven and that MPS does not raise prices broadly when supply chains tighten or cut them broadly when markets become oversupplied. Balow said price increases have primarily been limited to situations involving higher input costs, customer expedite requests or supply-chain requirements outside China that carry higher costs. Interim CFO Rob Dean said strong order levels gave the company the ability to slightly increase its gross-margin guidance, although management said margins remain near the low end of its targeted range. Balow said operating expenses have not changed materially in strategy, with higher revenue levels producing additional operating leverage and operating-margin expansion. The board authorized an additional $500 million for stock repurchases, bringing Monolithic Power Systems’ total current repurchase authorization to $1 billion. Monolithic Power Systems (NASDAQ: MPWR) is a fabless semiconductor company that designs and supplies high-performance power management solutions for a broad range of electronic systems. Founded in 1997 and headquartered in Kirkland, Washington, the company focuses on analog and mixed-signal integrated circuits that convert, regulate and monitor electrical power with an emphasis on efficiency, integration and power density. MPS's product portfolio includes DC‑DC switching regulators, power modules, power management ICs (PMICs), LED drivers, battery-management ICs, motor drivers, and AC‑DC power solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Monolithic Power Systems Q2 Earnings Call Highlights" was originally published by MarketBeat. 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Monolithic Power Systems, Inc. MPWR highlighted accelerating demand across AI infrastructure, data centers and communications during its second-quarter 2026 earnings call, with management emphasizing capacity expansion and broader solution offerings. The company also raised its near-term outlook, pointing to strong ordering trends while continuing investments in new technologies and supply chain flexibility. MPWR reported second-quarter 2026 non-GAAP earnings per share of $6.5, which exceeded the Zacks Consensus Estimate of $5.88. The company recorded revenues of $980.64 million, surpassing the Zacks Consensus Estimate of $904 million by 8.50%. Monolithic Power Systems, Inc. price-consensus-eps-surprise-chart | Monolithic Power Systems, Inc. Quote Management identified Enterprise Data as the largest growth driver, with revenue rising 44.8% sequentially and 164.3% year over year to $380.6 million. The segment represented 38.8% of total revenues. Tony Balow, Vice President of Finance, said growth reflected customer ramps, higher module content, platform refreshes and CPU-related demand. He added that channel inventory remained low, supporting management’s confidence in continued demand. MPS emphasized its transition from a semiconductor supplier toward a broader solutions provider. The company extended its capacity goal significantly beyond $6 billion to support future growth. CEO Michael Hsing said the company continues investing in technologies that open new markets, including high-density modules and system-level solutions. Management noted that modules are becoming increasingly important across applications. The company also received initial orders for high-speed DDR5 memory components and began sampling high-voltage AC-to-DC products for 800-volt data center architectures. MPWR’s Communications business continued gaining momentum, with second-quarter revenues increasing 18% sequentially and 78.3% year over year to $131.5 million. Growth came primarily from optical modules and switch-related power solutions. During Q&A, an Oppenheimer analyst asked about communications demand drivers. Management said both optical modules and broader switch-related applications, including DPU and NIC-related solutions, contributed to growth. Executives highlighted power density as a key competitive advantage, noting that integrated modules remain a major focus as customers seek compact power solutions. MPS guided third-quarter revenues to be in the range of $1.14 billion to $1.16 billion. The company expects GAAP gross margin of 55.2% to 55.8% and non-GAAP gross margin of 55.4% to 56.0%. Management said enterprise data and communications should continue leading growth, while consumer and portions of storage and computing remain areas of caution. Automotive remained a strategic focus, with management citing more than 1,500 new sockets shipped year to date across ADAS and other vehicle applications. MPWR discussed efforts to expand manufacturing capacity while balancing customer demand and inventory levels. Management said capacity expansion includes both front-end and back-end capabilities needed for increasingly complex modules. A Citi analyst asked about visibility into future enterprise data demand. Balow said ordering trends remained strong, with book-to-bill above one, while management continued monitoring customer demand carefully. The company ended the quarter with $1.41 billion in cash, cash equivalents and short-term investments, while internal inventory days improved based on projected next-quarter revenue. MPS reiterated its strategy of building a diversified business rather than depending on a single market. Management pointed to continued opportunities across automotive, communications, industrial and data-focused applications. The company also authorized an additional $500 million stock repurchase program, bringing total current authorization to $1 billion.Executives maintained that innovation, customer diversification and supply chain expansion remain central priorities as MPS scales its solutions portfolio. MPWR carries a Zacks Rank #2 (Buy), indicating that the stock is currently positioned favorably within the Zacks Rank system based on earnings estimate revisions. The Zacks Rank can change as analysts update estimates following quarterly results. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The stock has a Value Score of F, Growth Score of B, Momentum Score of F and VGM Score of F. Zacks Style Scores are designed to complement the Zacks Rank, with higher scores indicating stronger characteristics for specific investing styles. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Monolithic Power Systems, Inc. MPWR reported second-quarter 2026 non-GAAP earnings of $6.50 per share, up 54.4% year over year and 10.5% above the Zacks Consensus Estimate. Revenues rose 47.6% to $980.6 million, beating the consensus mark by 8.5%.Record sales reflected broad-based ordering, led by power solutions for AI and server applications. Enterprise Data revenue surged 164.3%, while the company shipped products for more than 1,500 new automotive sockets in the first half. GAAP net income climbed 90.6% to $257.3 million, or $5.22 per share, from $135.0 million, or $2.81 per share, a year earlier. Non-GAAP net income advanced 58.3% to $320.1 million. GAAP operating income rose to $303.9 million from $164.8 million.Non-GAAP gross margin was 55.6%, up 10 basis points (bps) year over year. Non-GAAP operating expenses increased 29.1% to $177.6 million, but strong revenue growth lifted the non-GAAP operating margin 270 bps to 37.5%. Monolithic Power Systems, Inc. price-consensus-eps-surprise-chart | Monolithic Power Systems, Inc. Quote Enterprise Data revenues reached $380.6 million and represented 38.8% of total sales. Growth reflected higher demand for power management solutions serving AI and server applications, with existing customers, new customers, higher module content and platform refreshes supporting the increase.Storage and Computing sales rose 2.3% to $199.8 million. Automotive revenues grew 8.2% to $157.1 million, aided by higher sales of infotainment and advanced driver-assistance system power solutions. Communications revenues jumped 78.3% to $131.5 million. Optical modules remained the larger contributor, while switches, data processing units and network interface cards also supported growth.Industrial sales increased 17.3% to $54.8 million. Consumer revenues declined 4.8% to $56.8 million, making it the only end market to contract year over year, although all six end markets improved sequentially. The company extended its capacity target significantly beyond $6 billion to support future growth and its transition from a chip supplier to a full solutions provider. Expansion covers both wafer supply and the more complex back-end assembly needed for modules and systems.The broader supply plan is designed to remain geographically balanced and adapt to customer requirements. Monolithic Power also received initial orders for high-speed DDR5 memory components and began sampling high-voltage AC-to-DC products for 800-volt data center architectures. The DDR5 effort is expected to expand the company's served market into next year. Management increased its 2026 Enterprise Data growth floor to 130% from 85%. Channel inventory remained very low, and book-to-bill was again well above one, providing more than one quarter of visibility.CPU server power remained a growth driver, with the company broadly positioned across x86 and ARM platforms. Management also sees further communications opportunities from both market expansion and additional share gains in optical and switching applications. Cash, cash equivalents and short-term investments totaled $1.41 billion at quarter-end, up from $1.37 billion at the end of the first quarter. Operating cash flow was $227.9 million, down from $250.3 million in the preceding quarter.Inventories rose to $675.8 million from $619.2 million, but days of inventory based on current-quarter revenue declined to 140 from 157. The board authorized an additional $500 million for share repurchases, bringing the current authorization to $1 billion. For the third quarter of 2026, the company expects revenues of $1.14-$1.16 billion. Non-GAAP gross margin is projected between 55.4% and 56%, while non-GAAP operating expenses are expected in the range of $201.2-$205.2 million. Monolithic Power currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Arista Networks Inc. ANET is scheduled to release second-quarter 2026 earnings on Aug. 4. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting a growth of 21.9% from the year-ago reported figure.Arista has a long-term earnings growth expectation of 19.9%. Arista delivered an average earnings surprise of 8.3% in the last four reported quarters.Akamai Technologies, Inc. AKAM is slated to release second-quarter 2026 earnings on Aug. 6. The Zacks Consensus Estimate for earnings is pegged at $1.58 per share, indicating an 8.7% decline from the year-ago reported figure.Akamai has a long-term earnings growth expectation of 8.1%. Akamai delivered an average earnings surprise of 7.5% in the last four reported quarters.Pinterest, Inc. PINS is set to release second-quarter 2026 earnings on Aug. 4. The Zacks Consensus Estimate for earnings is pegged at 36 cents per share, implying a rise of 9.1% from the year-ago reported figure.Pinterest has a long-term earnings growth expectation of 27%. Pinterest delivered an average negative earnings surprise of 4.1% in the last four reported quarters. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report Akamai Technologies, Inc. (AKAM) : Free Stock Analysis Report Arista Networks, Inc. (ANET) : Free Stock Analysis Report Pinterest, Inc. (PINS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 5:00 p.m. ET Chief Executive Officer and Founder - Michael R. Hsing Vice President, Finance - Tony Balow Operator: Good day, and thank you for standing by. Welcome to Monolithic Power Systems Inc. Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is ready. Please be advised that today's conference is being recorded. Now I would like to turn the conference over to Arthur Lee to read the Safe Harbor statement. Please go ahead. Arthur Lee: Earlier today, MPS released a written commentary on the results of its operations for the second quarter ended 06/30/2026. This document can be found on our website. Before we begin, I would like to remind everyone that in the course of today's presentation, we may make forward looking statements and projections within the meaning of the Private Securities Litigation Reform Act of 2000 that involve risk and uncertainties. The risk, uncertainties, and other factors that could cause actual results to differ from these forward looking statements are identified in the safe harbor statements contained in the Q2 26 earnings commentary and in our SEC filings, including our Forms 10-K and Forms 10-Q, which can be found on our website. Our statements are made as of today, and we assume no obligation to update this information. Now I would like to turn the call over to Tony. Tony Balow: Thanks, Arthur. Good afternoon, and welcome to our Q2 26 earnings call. In Q2, MPS achieved record quarterly revenue of $981 million 22% higher than the first quarter of 26 and 48% higher than the second quarter of 25. Our performance was a result of our continued innovation, our consistent and the resilience of our diversified market strategy. Let me take a few moments to call out a few of the highlights from the quarter. All end markets grew sequentially with enterprise data growing 45% as we continue to see strong broad based ordering patterns. We extended our capacity goals significantly beyond $6 billion to support future revenue growth and our transformation into a full solution provider. We received initial orders for high speed DDR5 memory we expect to grow our SAM into next year. We began sampling high voltage AC-to-DC products for 800-volt data center architectures as an expand beyond our current AI and server core power solutions. And finally, in our automotive market, so far this year, we have shipped products over 1.5 thousand new sockets as we increase our footprint in both ADAS as well as in other applications within the vehicle. Overall, while we continue to adjust for the fluid geopolitical and macroeconomic environment, our diversified market strategy remains unchanged. MPS focuses on innovation and solving our customers' most challenging problems. We consistently invest in new technologies that open new end markets and applications and accelerate our transition from chip only to a full service silicon solution based provider. And finally, we continuously expand and diversify our global supply chain allowing us to capture future growth opportunities, maintain supply stability, and rapidly adapt to market changes as they occur. Before moving to Q&A, I am also pleased to announce that our Board of Directors has authorized an additional $500 million for stock repurchases increasing our total current authorization to $1 billion. Operator, you may now open the webinar for questions. Operator: Ladies and gentlemen, to ask a question at this time, you will need to press. Please stand by while we can call the county roster. And our first question coming from the line of Rick Schafer with Oppenheimer. Your line is now open. Rick Schafer: Thank you, and congrats on the beat you raised you guys. I guess I have to ask about capacity, Tony. Communications was up 80% I think last quarter, it was up about 50% if memory serves. that is a pretty big step up. You know, I am just curious. Is that mostly transceiver power, or are you seeing meaningful contribution now from the other, the other sockets of Switch, DPUs, SmartNIC, I mean, does that kick in? Is that helping drive that? And then any color you can give on how the second half sets up. I mean, is that momentum continues to grow into Q3? Michael R. Hsing: Yeah. We see I reckon that we see a lot of growth. And a lot of demand. Modules, chips, and we see from multiple of our customers. And Tony, do you want to have the detail? Tony Balow: Yeah. I will just add a little more color. Rick, you do see contribution from both optical modules solutions as well as from what we generally bucketed as switches. As I think as I have mentioned previously, that is that is kind of a big bucket that would including power solutions for not only top of rack switches, but TPUs, NIC cards, and other things in the rack. So you are starting to see that grow as well. Optical is still with a bigger portion just because it is had a longer runway since last year, but you are seeing growth from both of those really driving the comms end market. Rick Schafer: Okay. As soon as my follow-up. I am just curious. I mean, I believe you are shipping 48-volt vertical power modules to a couple customers now. And I do not know if you could update us on that. I mean, do you expect to add any more this year? Maybe a sense of what your expectations are for 48-volt vertical power mods, in terms of maybe the mix versus VR this year? Or next year? How do you want to couch it? Thanks. Michael R. Hsing: it is more than a couple of customers. Okay. And we see new customers that were coming online. So okay. We start to ship. Yeah. Tony Balow: I think over the long term, as power requirements continue to increase across our end markets, Rick, we have talked about the fact that modules and solutions will increasingly be an important part of our business. So I think you will see that trend continue over the next couple of years. Rick Schafer: Thanks, you guys. Operator: Our next question in queue coming from the line of Joshua Buchalter with TD Cowen. Your line is now open. Joshua Buchalter: Hey, guys. Thank you for taking my question, and let me echo the congrats on the fantastic results. Maybe to start, I mean, you gained nearly $120 million in the data segment in 1 quarter, which is pretty astounding. Can you walk through the drivers of that upside and growth? And I think importantly, you have the inventory dynamics play out a couple of years ago. Can you speak to your confidence that there is no inventory building here and the overall visibility in that segment Thank you. Michael R. Hsing: Thanks for remembering last couple of years. We have all these shortages in the industry. We pull it off. Okay? Thanks for remember that. We will continue to there is no reason not to believe we are we are not we are we are not pro pulling off. Although it is very difficult. Okay? I mean, but we are going to make it happen. Tony Balow: Yeah. And I will just add if you look at kind of the underlying growth drivers for that particular end market, they really have not changed from what we have talked about. You know, we have talked about ramping existing customers, ramping new customers, seeing the module content increase, per Rick's question previously. Deming platform refreshes that drive content, then, of course, CPU. And we saw all that was very strong in Q2. And I think since you are kind of talking about the sustainability of that, there is probably a couple of different ways, additional Michael said. I always start channeling and inventory. is 1 indicator, and that remains very low. So we believe that is continuing to sell through. Over time. And I think right now, based on what we can see, we are willing to raise floor for that particular end market from 85% for the year to 130% for the year. Michael R. Hsing: Yeah. I want to add in this enterprise data centers, and then it is relatively new. And we start to see these significant business about 2-3 years ago 3 years ago. Starting. And we do not have any concentrated customers. And pretty much, we engage from a large to small. And where you see the revenue happen now. And it will continue that way in the in the next year. Joshua Buchalter: Thank you both for all the color. I will take the hint and not ask about AI servers again. That said, I guess, we feel very much. Yeah. I was like, great. Thank you. So yeah. I know your policies, Michael. You know, it is great to see the initial orders for the DDR5, high speed interface controller. You know, you mentioned that could be SAM-expansive. Can you maybe help us with how much And it does seem like a quite a new capability for monolithic Are there other applications that you could use this technology for that beyond memory controllers as well? Thank you. Michael R. Hsing: Yeah. Yes. This is a new to us. This is a high-speed, very high speed into the gigahertz. Kind of things. And, again, in a very precision. Okay. And pretty much the analog. Circuitry. And we can expand the technology to other communications. And, once we have established a know how. So that is a very-- these are a true fundamental know hows. And, okay, and other business, we want to get this 1 to launch it first. And then we will migrate to other applications. Yeah. Operator: In terms of the second part of your question, which was how expansive it could be, I would still say we are very much early innings. Tony Balow: We want to prove ourselves in this particular market. I think it is too early for us to call any kind of revenue ramp on our side. We are just signaling that we continue to run our playbook and look for new sockets out there that can expand overall SAM over time. Michael R. Hsing: But in the history, when we are mentioning something, it will take you into a revenue. Yep. Joshua Buchalter: Thank you both, and congratulations again. Operator: Our next question in queue coming from the line of Tore Svanberg with Stifel. Tore Svanberg: Yes. Thank you. Let me echo congratulations for another record quarter. How should we think about the segments for Q3? I mean it sounds like all markets are growing right now. But just wondering on a relative basis, could give us some color on each segment into Q3. Michael R. Hsing: Well, I know the oil market-- maybe Tony can point out some of the not so good ones. Okay. I think the consumer 1 where we are kind of still lagging because of all the efforts that we focus on it. And the consumer market, it does not mean we give it up. Okay? And we will continue a very diversified way of growing our business. And, as we talk as I talk, talk about it in the past, NPS is transitioning from a chip company, a semiconductor company to be a semiconductor-based solution providers. With our solutions. And so other segments that I can and automotive con continue to grow. So, okay, other ones, the communication side will continue to grow. So, like, and industrial's kind of lagging a little bit. And that came in-- that does not mean we are defocusing. Tony Balow: Yeah. And I will just add a little bit. I think the story is going to feel pretty similar You are certainly being led by the data-centric businesses, with enterprise data and comms, of course, leading the pack. I think industrials could grow a little bit with the market, but again, we primarily said that is a design win type year for us this year where we continue to pile up additional sockets that will turn into revenue in the future. Think the areas that we are cautious on are the ones Michael had pointed out and then we said this last quarter as well, consumer being 1. And then I think the notebook side of storage and compute will continue to remain cautious on that 1 as we go into the second half. Tore Svanberg: Yes. that is great color. As my follow-up, you mentioned you are now sampling the 800-volt solution. When should we expect to see some revenues from Monolithic Power there? And are these products based on silicon GaN and silicon carbide, or is it 1 or the other? Thanks. Michael R. Hsing: We have a well, in the past, Tony, you know, I will openly say, I do not believe GaN. And now I think I was proven wrong. But it is up to a point where we cannot ignore GaN. And we think last year, we developed our own GaN, and we will have a working device. And in terms of 800-volt solution, we totally rely on NPS silicon carbide device. And revenue wise, probably, you will know you will know, and I gave me and all the market will know. And, okay, where the data center transition happened? When that happens, and we will have the revenues. In terms of the wins, again, then we do not know. We know as much as you know. Great. Tore Svanberg: Thank you very much. Congrats again. Thank you. Operator: Our next question coming from the line of William Stein with Truist Securities. Your line is now open. William Stein: Great. Thanks for taking my question. I want to add my congrats to the fantastic results and outlook. I am wondering if you could talk about whether pricing meaningfully influenced the sequential growth or the outlook in Q3? Michael R. Hsing: Yes. Yes. I know what you mean whether we increase price or not. And we do not NPS never gouges prices when the supply chain is tight. And we want to build a consistent model where we execute consistently within our models, And when supply chain is tight and raise the price, how about a way over the way we reduce the price? We do not. And we operate in a consistent way. And our customers appreciate that. So in terms of whether due to the price increase, definitely, it is not. it is all products. Yeah. Tony Balow: The only thing I would add to that at all is for us on pricing, it is very consistent to Michael's point. We have raised some prices, but it is primarily been in kind of 1 of 3 areas in general, right, where we have seen input costs go up, to make sure that we do not get diluted on the margin line. Where people are asking for expedites, because obviously that can influence our own supply chain and then finally, where people might be asking for specific supply chains outside of China, which can be naturally more expensive. So maintain a very consistent approach to what you have heard previously as we look at our pricing. William Stein: that is really helpful. Michael, I want to shift for a second to some things that I think are closer to your interests, some of the smaller but emerging growth opportunities like robotics, humanoid robotics, and home automation or building automation. Can you talk about your traction in those 2 emerging-- and they are of interest to us? Michael R. Hsing: I am speaking. A million square feet building is installing our building controls. But I have to tell you, it is like we are still lagging of the software. The hardware is all done. And with some minor revisions, and, like, I may not have-- but the software is the key, the ease of use. And how we implement it. And by the end of this year, we should be able to complete everything. And there is a multiple of our customer-- it is not our customers. In that case, the potential customers they are waiting for us to install in their building. And I am looking at that when I am in the market segment, but we are looking at this opportunity and to my surprise, it is about $40 billion to $50 billion. And the MPS has all the key product and the and the technology. The software is what we were building. And that is again, you exactly talking about my topics that I am working on. The other 1 is the robotics. Again, robotics. Okay. there is a lot of-- there is, especially, a lot of Chinese companies show a lot of entertainment and we will see. And, we have all our design-in solutions. Okay. They all happen in the US side and also the China side. Okay. And they are all using NPS solutions. And now the next question is, okay, how are we going to-- where the robot is going to be used? And from our own factory, and this is not humanoid. Robot. We use our own product to, to improve, especially the modules. Production not the production, the testing. And also the reliability test. And we use our own motion controls and the robotics. Again, and it is the same as the equivalent to a robot. And to make all these things happen. And, our customers are actually our suppliers. to our own automation. They will use those solutions sell it everywhere else. Thank you. William Stein: Thank you. Operator: Our next question in the queue coming from the line of Quinn Bolton with Needham and Company. Your line is now open. Quinn Bolton: Hey, guys. I will offer my congratulations as well. Tony or Michael, I wanted to come back to the optical transceiver part of the business, since I think that is the biggest part of comms. Can you just sort of discuss what you are seeing on the competitive landscape Is competition mostly PMICs? Is it mostly discrete DC-to-DC converters from folks like TI or analog devices? And then can you give us any sense what you think your share might be for power management within those optical transceivers? And then I have got a follow-up. Michael R. Hsing: that is a very boring topic. Okay. that is over the last few years, we talked about power modules. Okay? I think that you realize those very early on. And, okay, I mean, it is more than 5 years ago now. And we have these power modules. And very high power density modules. And These are encapsulated modules. And since we have the highest power density ICs and we integrate fully integrate it each of these module with the inductors. And with all the capacitors and it is a total power solution, plug-in power solutions in a very small form factor. And I said with a straight face, we are the highest-power-density company in the world now. And I do not know about optical, market segment as long as I know we provide the best power density we will win all these sockets and including optical modules. Tony Balow: As the share comment goes, obviously, we will not talk about specific customers. But certainly, I think if you look at the overall market, there is still room for us to grow. And I think just net of both the TAM growth and share, I think it can actually be a primary growth driver in the comm segment going forward. I do not think we can actually quote the exact percentage of share at this time. Quinn Bolton: Okay. But you certainly still see share gain opportunities in that market, sounds like? Tony Balow: Yes. I think at some customers, we would see additional opportunity to gain share in some of the sockets. But I think the net of this is that within the comm segment between TAM and share, there is still a very substantial growth opportunity ahead of interest to us? Quinn Bolton: Great. And then I guess just coming back to the capacity support, in the past, I think when you went from $2 billion to $4 billion you talked about the incremental capacity largely coming from outside of China. As you have now built capacity up to and beyond $6 billion. Can you give us some sense what the geographic split of that capacity is? Is it fairly balanced between China? And non China? Does it lean 1 way or the other? Michael R. Hsing: it is not settled down yet. We now can do it depending on what our customers' requirements. Okay. At this time, wherever the all we need, it goes. Okay. And wherever we can provide a product, they will buy. Okay. And but we built a very balanced approach. And what is the percentage in the end? Okay. it is hard. it is difficult to call now. Tony Balow: The only thing I would add on that is, you know, when you just call a total number, it sometimes gets lost in the detail, but I think we have been increasingly focused not just on the foundry side of business. But also the back end part of the business because as Michael alluded to, modules and solutions will become increasingly important. And so that is actually more complicated back end process as well. So as we look to bring out new partners and look to bring them on in a geographically balanced way, that goes for both the front end and the back end. Quinn Bolton: Understood. Thank you. Michael R. Hsing: Yeah. Especially, yeah, especially our module assembly. it is more difficult. it is a 3D effect. it is more complicated than the assembly of a phone even. And so it requires a lot of experiments and then a lot of know-how. You know, to getting all these modules. And so we now, so, like, expand to and, anyway, in a way that we will find these equipments and these capability to make it happen. Quinn Bolton: Thank you. Operator: Our next question coming from the line of Joseph Quatrochi with Wells Fargo. Your line is now open. Joseph Quatrochi: Yeah. Thanks for taking the questions. Was wondering if maybe you could just kind of give us an update on how you are thinking about automotive demand in the second half of this year? You talked about 1.5 thousand new design sockets year to date. How should we think about the ramp-up revenue from those new wins as well? Tony Balow: Yeah. I think Yeah. I think the year is still playing out pretty much as expected. And just to repeat what you said in the past, we thought the first half would be flat with the second half ramping up. And I think we feel pretty comfortable with that second half overall ramp. I think we land on a year over year basis, we are still thinking the end market can be in the mid teens kind of year over year. The 1 thing about the ramp that gives us additional confidence is that it is very broadly based. it is not isolated to 1 or 2 customers for what Michael was talking about and so the diversification that we look for in all of our end markets right now. They called out the 1.5 thousand specifically to show that is not just very much focused on ADAS, which has been a historical strength for us. But we continue to see it broadening out in the portfolio for other sockets in the vehicle. Michael R. Hsing: Yeah. Yeah. We are focused on things like zonal, the 48-volt systems. And also, we address the battery side. Okay? and LiDAR, and so these are the emerging market. And or emerging requirements from automotive. I think that, in the next few years, they all will be okay. And installed in the car, it will see very popular. And on the market. and we will always see MPS revenue growth. Joseph Quatrochi: Thanks for that. And then as a follow-up, I think last quarter, you talked about your plans to enter the RCD market. And starting to sample with customers? Just curious. Any update in terms of how that is going? Michael R. Hsing: We are sampling. Okay. And we are still developing. And a lot of new product. And is a very new to us. And but we are confident that we will be turned into revenue. Although, we have some revenue now. Okay. Yeah. Tony Balow: I Yeah, just to keep it from a model basis, you know, we have that is not going to be a needle mover in 2026 for us. Right, in terms of revenue. Yep. Joseph Quatrochi: Thank you. Operator: Our next coming from the line of Christopher Caso with Wolfe Research. Your line is now open. Chris Caso: Thank you. Good evening. I guess the first question is an update on where CPU server power stands right now. I know that you guys have gained a lot of share over the years on that. That market is heating up because of the Gen 6 CPU. So how impactful has that been to the ED segment? And where do you see that going as you go into the end of the year into next year? Tony Balow: Yeah. Thanks, Christopher. Let me start, and then Michael and Robert can jump in as well. I think 1 of the things is we have been talking about it for close to a year that CPU has been 1 of the growth drivers for us in enterprise data. So it is it is something that has been and I think will continue to be part of the overall growth story. To the extent that Gen 6 AI drives further CPU growth, that will continue to be a tailwind for us. As you know, it is difficult for us to separate sometimes a pure AI sale from a CPU sale. So it is a little difficult for us to parse those specifically. But if we start to see some of the forecasts come to play that you have seen from some of those in industry, we think that could be, you know, an additional growth factor for us even going forward. From a share perspective, again, I think we will probably pass on specific share. I think we are very broadly indexed across both x86 and ARM players. And so no matter who sort of wins in that race, we think we can participate. Operator: I think I answered your question 1 time in terms of the-- okay. Michael R. Hsing: What is the percentage at the time? In the CPU side, we want to get in the CPU market segment. Think that what I was asked to know what the share-- market shares. We want to be. Okay. I mentioned it in earnings calls that if it is lower than 30% I call it a failure. Okay. I think that we are comfortable with it now. So we are past that. And that is where the good position we are in. Now. And then we will continue that. Thank you for that. Chris Caso: As a follow-up, maybe a bit of a longer term question. And maybe as we look out, you know, say, over the next, you know, 2 years, 2 plus years, do you still expect that I mean, enterprise data has been the fastest growing part of your business because it has been the fastest end market. Do you expect that to continue to be the case? And, you know, I know, Michael, you like to run a diversified business. But, you know, that end market is just growing so quickly. So I guess maybe the question is, is the growth in that end market and enterprise data going to make it more difficult to diversify the business. Michael R. Hsing: Good question. Okay. And we never focus on any market segments. And we provide picks in the shovels and the blue jeans. And, as long as we are making the best of it, we will win those segments. And, so we are not really a gold diggers. Okay? Be asking us to find out the empty mountains and okay. But we do not do that kind of things. And we just provide the basic best elements for other people to succeed at it. And 1 time, automotive was big. 1 and other times, like consumer was big. And we learn from our customers. We let the market demand. to decide that. As long as we focus on the fundamental development, I think that we will win in the very long term. And a clear example was a couple of years ago, it is in a-- the AI is not gaining and went sideways or enterprise data go went sideways, even dropped slightly. And that year, all the other business grow tremendously, like including automotive. And that is exactly what we wanna see and okay. And we have a we want to provide to our investors a very consistent way of growing MPS. Tony Balow: I mean, even this last Q2, right, outside of enterprise data, the rest of the businesses saw double digit growth. So I understand your comment on what TAM might be growing faster, but you can see you are still seeing pretty substantial growth outside of ED. Chris Caso: Thank you. Operator: Our next coming from the line of Kelsey Cha with Citi. Your line is now open. Kelsey Chia: Hi. Good evening. So based on the strong and broad based ordering patterns guys have, I am wondering how much visibility do you have in the enterprise data end market? And I was wondering if you can provide any color as to how the 2027 outlook could look like based on the design wins, visibility, expected product ramps, or elaborate on any incremental revenue opportunities and ramp within that segment? Tony Balow: Yeah. I will start on that 1. And I think in general, 2027 is a bit far away. We are still trying to land 2026. But I think if you to answer the first part of your question and the visibility, again, the longer term ordering patterns that we saw begin even late last year have really maintained. And our book to bill this cycle was again well above 1, So we do have, you know, more than a quarter type visibility like we were dealing with maybe midway through 2025. That does not mean we necessarily have visibility all the way out to the end of 2027, though. But I think the way I would address it is I think the underlying structural growth drivers have not really changed. Right? We have best of breed from a current density and modules you see more and more of our end markets adopting those high current density modules for their applications. And we continue to win new sockets. So I think our ability to continue to grow into 2027 is still structurally very sound. I think it is too early to put a number on it. Michael R. Hsing: We well, here is a the true demand. Is determined by the market. And we do not want our customers to end it up in a lot of wasteful inventory. At the same time, we will watch us. Okay. Our own inventory. We will end up a lot of a lot of inventory with we cannot sell. So we clearly balance that. And what is the forecast We do not do them. Okay. Even though we have a NCNRs. Okay. And we shovel into our customer's throat. That there is a bad relationships. And our relationship is very long term. And so it cannot and although the order booking is very good, as a as Tony said it. Okay. But we do not see the business in that way. And we do things swiftly according to our customer demand. Kelsey Chia: Got it. And, also, with such strong revenue outlook, could you help us think about gross margins and OpEx trajectory? It seems that you guys are lending somewhat below your long term OpEx guidance right now. Michael R. Hsing: We are in the models. And we are still in the models, although in the low end. My-- I said I was-- I will be heavier, so we are higher. I was not-- I said I was not happy. And look at this. We focus on grow growing the revenue and growing the net profit. EPS that is the key reason. The other 1 is nobody wants us to have a high gross margin. for less of a-- lack of a growth. Nobody wants us to do that. And our shareholder does not want us to do that certainly. Okay? And so we focus on this. It will be-- gross margins, I said that we will figure out, you know, we will grow higher. Certainly, it is not in the near future, as well. They will stay similar or maybe slightly higher. Robert W. Dean: Hi, Kelsey. This is Robert. I will add to what Michael was saying and I will add on to what Tony was saying about the strong order levels which continued into Q2. Gave us the ability to incrementally expand our guidance on gross margin again just slightly, but it is there. So as Michael said, we are at the low end of where we want to be, but we are feeling comfortable about where we are at for Q3. Operator: And, Kelsey, the last part of your question was a little bit on OpEx. Tony Balow: And I think in general, we have not changed any of our thesis around how we are trying to invest for the future. I think what you see is when you get to higher levels of revenue, it is difficult to keep the levels of spending up to that model. And so you see some additional leverage as you pull through to operating margin. And I think you have seen pretty healthy expansion in operating margin over the past couple of quarters. Kelsey Chia: Got it. Thank you. Operator: Our last question will come from the line of Sebastian Naji with William Blair. Sebastian Naj: Yeah. Thanks for taking the questions, and congrats on a great quarter here. it is great to see the momentum across the business. AI data center is clearly a strong tailwind for the enterprise data business, also in communications. A little bit even in storage and compute. I mean, if I start to add up all these segments, you are you are looking at data center exposure that is approaching roughly 50%. I mean, is that the right way to think about it across your different end markets? Tony Balow: I think you are picking the right components as you go in there. Right? Obviously, the optical module business, the switch business can be pulled to the data center, all of enterprise data. Then, remember inside of storage, you really kind of have 3 big sub buckets. DDR 5, HDD, and SDD. HDD and SSD, I think, over time, are becoming increasingly focused, whereas at 1 point, you know, they might have been more consumer based. We have not broken out, you know, storage and compute versus notebook. In there, but I think you are picking the right components as you look at those things that could ride some of the of the healthy demand pull-through from the data center right now. Sebastian Naj: Okay. Great. And maybe just as a quick follow-up on the incremental supply capacity that you are bringing online. Is any of that on newer node processes, like 40-nanometer, or is that mostly on existing 65-nanometer solutions? Michael R. Hsing: I think it is mostly the existing. So, like I have-- this same thing we are talking about for some time now, we have an increase in capacity. Again, Tony said this is not only about the silicons and the wafers. Okay? We are building a lot more, we are building systems. And that changes the complexities of the buy silicon only. I mean, we have been on this journey for-- since 2017. And all the procurement and the qualification component called qualification, we have become mature. And now it is not-- we have to pull some more new tricks in the next year or so. to increase all these capacities. Okay. Right. Would you say it is the worst or the hardest to increase capacity? Over the last 10 years that you see? it is it is different periods, different times, and, okay, and the qualified vendors. Okay, and in the silicon side, we have a lot of experience. And again, you move up onto a system. How you assemble all these sys-- all these systems. And how you qualify all these vendors and how you are going to take the-- UL is a completely different model. That we have to operate on it. And we became I would say that we became a lot more mature, and there is a lot more room to go. A lot more improvement. To go. Sebastian Naj: Got it. Great. Thank you so much. Thank you. Operator: And I am showing there are no further questions in the queue at this time. I will now turn the call back over to Tony Balow for any closing comments. Tony Balow: All right. Thank you, operator. Thank you all for joining us for the conference call today. We look forward to speaking with all of you for our next call for our third quarter 26 results. Thank you again and have a nice day. Operator: This concludes today's conference call. Thank you for your participation. And you may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Monolithic Power Systems. The Motley Fool has a disclosure policy. Monolithic Power Systems (MPWR) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Earlier this week, analysts projected that Monolithic Power Systems would report quarterly earnings of US$5.88 per share on US$903.97 million in revenue, implying very large year-over-year growth in both metrics and a slight downward revision to EPS estimates over the past month. The combination of strong expected earnings expansion and references to prior outperformance has sharpened attention on how resilient Monolithic Power Systems’ profit and growth profile may be across its core end markets. Against this backdrop of very large anticipated earnings growth, we’ll examine how the upcoming report could influence Monolithic Power Systems’ AI-focused investment narrative. The future of work is here. Discover the 34 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. To own Monolithic Power Systems, you generally need to believe its power management chips will remain critical across AI data centers, autos, and other electronics, supporting durable demand and healthy margins. This week’s upbeat earnings expectations may reinforce confidence in near term AI data center momentum, but they do not remove the key risk that AI and enterprise spending could prove more cyclical than hoped, which remains the most important near term swing factor for the story. In that context, the company’s April guidance for Q2 2026 revenue of US$890 million to US$910 million and mid 50s gross margins looks especially relevant. Those targets sit close to current analyst estimates for the coming quarter and effectively set the bar that Thursday’s report will be judged against, making any change in revenue or margin guidance a potential catalyst for how investors reassess both the AI narrative and the resilience of demand across MPS’s broader end markets. But for all the excitement around AI, investors should be aware of how quickly project ramps can slip and how exposed earnings may be if hyperscale demand... Read the full narrative on Monolithic Power Systems (it's free!) Monolithic Power Systems' narrative projects $5.5 billion revenue and $1.6 billion earnings by 2029. This requires 23.1% yearly revenue growth and an earnings increase of about $0.9 billion from $679.7 million today. Uncover how Monolithic Power Systems' forecasts yield a $1797 fair value, a 44% upside to its current price. Some of the most optimistic analysts were already penciling in roughly US$6.1 billion of revenue and US$1.9 billion of earnings by 2029, which is a far more aggressive path than the consensus view. When you set those expectations against today’s strong but still uncertain AI and enterprise data center outlook, it shows how wide opinion can be and why you should stress test both bullish project ramp assumptions and the possibility that competitive or timing setbacks could produce very different outcomes from here. Explore 6 other fair value estimates on Monolithic Power Systems - why the stock might be worth 46% less than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Monolithic Power Systems research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision. Our free Monolithic Power Systems research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Monolithic Power Systems' overall financial health at a glance. These stocks are moving-our analysis flagged them today. Act fast before the price catches up: Capitalize on the AI infrastructure supercycle with our selection of the 56 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. Find 49 companies with promising cash flow potential yet trading below their fair value. The latest GPUs need a type of rare earth metal called Neodymium and there are only 29 companies in the world exploring or producing it. Find the list for free. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MPWR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Monolithic Power (MPWR) reported $980.64 million in revenue for the quarter ended June 2026, representing a year-over-year increase of 47.6%. EPS of $6.50 for the same period compares to $4.21 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $903.97 million, representing a surprise of +8.48%. The company delivered an EPS surprise of +10.54%, with the consensus EPS estimate being $5.88. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Monolithic performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenue by End Market- Storage and Computing: $199.8 million versus the four-analyst average estimate of $186.31 million. The reported number represents a year-over-year change of +2.3%. Revenue by End Market- Communications: $131.5 million compared to the $127.14 million average estimate based on four analysts. The reported number represents a change of +78.2% year over year. Revenue by End Market- Automotive: $157.1 million versus the four-analyst average estimate of $155.46 million. The reported number represents a year-over-year change of +8.3%. Revenue by End Market- Enterprise Data: $380.6 million versus $323.04 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +164.3% change. Revenue by End Market- Industrial: $54.8 million versus $51.15 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +17.3% change. Revenue by End Market- Consumer: $56.8 million versus the four-analyst average estimate of $58 million. The reported number represents a year-over-year change of -4.9%. View all Key Company Metrics for Monolithic here>>> Shares of Monolithic have returned -6.2% over the past month versus the Zacks S&P 500 composite's -1.5% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Monolithic Power (MPWR) came out with quarterly earnings of $6.5 per share, beating the Zacks Consensus Estimate of $5.88 per share. This compares to earnings of $4.21 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +10.54%. A quarter ago, it was expected that this chipmaker would post earnings of $4.89 per share when it actually produced earnings of $5.1, delivering a surprise of +4.29%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Monolithic, which belongs to the Zacks Semiconductor - Analog and Mixed industry, posted revenues of $980.64 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 8.48%. This compares to year-ago revenues of $664.57 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Monolithic shares have added about 37.8% since the beginning of the year versus the S&P 500's gain of 6.9%. While Monolithic has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Monolithic was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $6.45 on $976.91 million in revenues for the coming quarter and $24.18 on $3.71 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Semiconductor - Analog and Mixed is currently in the top 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Semtech (SMTC), has yet to report results for the quarter ended July 2026. This chipmaker is expected to post quarterly earnings of $0.62 per share in its upcoming report, which represents a year-over-year change of +51.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Semtech's revenues are expected to be $328.37 million, up 27.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Monolithic Power Systems, Inc. (MPWR) : Free Stock Analysis Report Semtech Corporation (SMTC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

SCHAFFHAUSEN, Switzerland, July 30, 2026 (GLOBE NEWSWIRE) -- Monolithic Power Systems, Inc. (“MPS”) reported its results after market close on July 30, 2026 and will host a question-and-answer webinar at 2:00 p.m. PT / 5:00 p.m. ET. The webinar can be accessed from the Investor Relations section of the MPS website at www.monolithicpower.com. Ongoing Business Conditions In the second quarter of 2026, MPS achieved record quarterly revenue of $980.6 million, 21.9% higher than the first quarter of 2026 and 47.6% higher than revenue in the second quarter of 2025. Our quarterly performance was the result of our continued innovation, our consistent execution and the resilience of our diversified market and supply chain strategy. Q2 2026 highlights include: All end markets grew sequentially with Enterprise Data growing 45% as we continued to see strong, broad-based ordering patterns. We extended our capacity goal significantly beyond $6B to support future revenue growth and our transformation into a full solution provider. We received initial orders for high-speed DDR5 memory components which we expect to grow our SAM into next year. We began sampling High Voltage AC to DC products for 800V data center architectures as we expand beyond our current AI and server core power solutions. In our Automotive market, so far this year, we have shipped products for over 1500 new sockets as we increase our footprint in both ADAS and other applications within the vehicle. We continue to adjust to the fluid geopolitical and macro-economic environment, but our diversified market strategy remains unchanged: MPS focuses on innovation and solving our customers’ most challenging problems. We consistently invest in new technologies that open new end markets and applications. We continuously expand and diversify our global supply chain allowing us to capture future growth opportunities, maintain supply stability, and rapidly adapt to market changes as they occur. “Our results demonstrate the strength of our diversified model and our continued success in transforming from a chip-only, semiconductor supplier to a full service solutions provider,” said Michael Hsing, CEO and founder of MPS. Q2 2026 Revenue Results MPS reported second quarter revenue of $980.6 million, 21.9% higher than the first quarter of 2026 and 47.6% higher than revenue in the second quarter of 2025. Compared with the first quarter of 2026, sales improved sequentially across all end markets. In our Enterprise Data market, second quarter 2026 revenue of $380.6 million increased 44.8% from the first quarter of 2026. The sequential increase was driven by higher sales of our power management solutions for AI and server applications. Second quarter 2026 Enterprise Data revenue was up 164.3% year over year. Enterprise Data revenue represented 38.8% of our total second quarter 2026 revenue compared with 32.7% in the first quarter of 2026. Second quarter 2026 Communications revenue of $131.5 million was up 18.0% from the first quarter of 2026 primarily as a result of higher sales of power solutions for optical modules and switches. Second quarter 2026 Communications revenue was up 78.3% year over year. Communications sales represented 13.4% of our total second quarter 2026 revenue compared with 13.9% the first quarter of 2026. Second quarter 2026 Storage and Computing revenue of $199.8 million increased 14.6% from the first quarter of 2026 on higher sales for memory and storage power management solutions. Second quarter 2026 Storage and Computing revenue was up 2.3% year over year. Storage and Computing revenue represented 20.4% of MPS’s second quarter 2026 revenue compared with 21.7% in the first quarter of 2026. Second quarter 2026 Industrial revenue of $54.8 million increased 12.7% from the first quarter of 2026. Second quarter 2026 Industrial revenue was up 17.3% year over year. Industrial revenue represented 5.6% of our total second quarter 2026 revenue compared with 6.0% in the first quarter of 2026. Second quarter 2026 Consumer revenue of $56.8 million increased 4.2% from the first quarter of 2026. Second quarter 2026 Consumer revenue was down 4.8% year over year. Consumer revenue represented 5.8% of our total second quarter 2026 revenue compared with 6.8% in the first quarter of 2026. Second quarter Automotive revenue of $157.1 million increased 3.1% from the first quarter of 2026 primarily from higher sales of Infotainment and ADAS power solutions. Second quarter 2026 Automotive revenue was up 8.2% year over year. Automotive revenue represented 16.0% of our second quarter 2026 revenue compared with 18.9% in the first quarter of 2026. Q2 2026 Gross Margin & Operating Income GAAP gross margin was 55.2%, 0.1 percentage points lower than the first quarter of 2026. Our GAAP operating income was $303.9 million compared to $241.2 million reported in the first quarter of 2026. Non-GAAP gross margin for the second quarter of 2026 was 55.6%, 0.1 percentage points higher than the first quarter of 2026. Our non-GAAP operating income was $367.7 million compared to $288.0 million reported in the first quarter of 2026. Q2 2026 Operating Expenses GAAP operating expenses were $237.2 million in the second quarter of 2026 compared with $203.9 million in the first quarter of 2026. Non-GAAP operating expenses were $177.6 million, up from $158.3 million in the first quarter of 2026. 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 expense. Total stock-based compensation and related expenses, including approximately $1.8 million charged to cost of goods sold, was $53.5 million in the second quarter of 2026 compared with $48.5 million in the first quarter of 2026. The Bottom Line Second quarter 2026 GAAP net income was $257.3 million or $5.22 per fully diluted share, compared with $193.2 million or $3.92 per fully diluted share in the first quarter of 2026. Second quarter 2026 non-GAAP net income was $320.1 million or $6.50 per fully diluted share, compared with $251.3 million or $5.10 per fully diluted share in the first quarter of 2026. Second quarter 2026 non-GAAP tax rate of 15% was flat to the first quarter of 2026. There were 49.3 million fully diluted shares outstanding at the end of the second quarter of 2026. Balance Sheet and Cash Flow Cash, cash equivalents and short-term investments were $1,413.8 million at the end of the second quarter of 2026 compared to $1,367.1 million at the end of the first quarter of 2026. For the second quarter of 2026, MPS generated operating cash flow of $227.9 million compared with first quarter of 2026 operating cash flow of $250.3 million. Accounts receivable at the end of the second quarter of 2026 were $343.6 million, representing 32 days of sales outstanding, which was 2 days lower than the 34 days reported at the end of the first quarter of 2026. Our internal inventories at the end of the second quarter of 2026 were $675.8 million, up from $619.2 million at the end of the first quarter of 2026. Days of inventory of 140 days at the end of the second quarter of 2026 was 17 days lower than at the end of the first quarter of 2026. Comparing current inventory levels using next quarter’s projected revenue, days of inventory at the end of the second quarter of 121 days was 7 days lower than at the end of the first quarter of 2026. Q3 2026 Business Outlook For the third quarter of 2026 ending September 30, we are forecasting: Revenue in the range of $1,140 million to $1,160 million. GAAP gross margin in the range of 55.2% to 55.8%. Non-GAAP gross margin in the range of 55.4% to 56.0%, 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 $53.2 million to $55.2 million including approximately $1.7 million that would be charged to cost of goods sold. GAAP operating expenses between $252.7 million and $258.7 million. Non-GAAP operating expenses in the range of $201.2 million to $205.2 million. This estimate excludes stock-based compensation and related expenses in the range of $51.5 million to $53.5 million. Interest and other income in the range from $7.8 million to $8.2 million before foreign exchange gains or losses. Non-GAAP tax rate of 15% for 2026. Fully diluted shares outstanding in the range of 49.1 to 49.5 million shares. In addition, our Board of Directors has authorized an additional $500 million for stock repurchases bringing our total current authorization to $1 billion. For further information, contact: Tony BalowVice President, FinanceMonolithic Power Systems, [email protected] 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, that should not be unduly relied upon, including under the “Q3 2026 Business Outlook” section herein, our statement regarding our business focus, our statement regarding our capacity growth goal, our statement regarding our expected shipments for the Automotive end market, our statement regarding our expected expansion of our SAM for high-speed DDR5 memory components, our statement regarding the expansion and diversification of our supply chain to allow us to capture future growth opportunities, maintain supply stability and swiftly adapt to market changes as they occur, and our statement regarding the major customer sampling of our first high speed interface products for DDR5, 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 third quarter of fiscal year 2026 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, 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 trends and prospects, and our goal to expand our capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described above. 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 current and potential global conflicts, global tariffs, export controls and retaliatory measures and announcements regarding same, 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 impact from current and potential global 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, export controls and retaliatory measures and announcements regarding same, and geopolitical uncertainties, including current and potential global conflicts; the Company’s ability to timely and adequately remediate its material weakness; 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 February 27, 2026. MPS assumes no obligation to update the information in this earnings commentary or in the accompanying webinar. Non-GAAP Financial Measures This earnings 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 operating income, non-GAAP other income, net, and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, operating income, other income, net, 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, amortization of acquisition-related intangible assets, net deferred compensation plan expense, 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. Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan 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. Non-GAAP other income, net excludes the effect of deferred compensation plan 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. 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. 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. About Monolithic Power Systems MPS is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future. Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world. Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries. RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES(Unaudited, in thousands)