Financial Data and Key Metrics Changes - MPS achieved record quarterly revenue of $664.6 million, which is 4.2% higher than Q1 2025 and 31% higher than Q2 2024 [3][4] - The company continues to see diversified revenue growth across all markets, reflecting a strong demand profile [4] Business Line Data and Key Metrics Changes - Storage and compute revenue grew sequentially, driven by demand for memory and notebook power solutions [4] - The enterprise data segment is expected to grow between 20% to 30% sequentially in Q3 2025, with a seasonal uplift in consumer markets [8][16] Market Data and Key Metrics Changes - The company is seeing strong demand across all end markets, with enterprise data and AI ASIC programs starting to ramp up [10][11] - The automotive segment is anticipated to flatten in the middle of the year but is expected to pick up in Q3 and Q4 as new content opportunities come online [32] Company Strategy and Development Direction - MPS is transforming from a chip-only semiconductor supplier to a full-service silicon-based solutions provider, focusing on innovation and solving customer challenges [4][5] - The company is investing in new technology and expanding into new markets to capture future growth opportunities [4] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the outlook for the remainder of the year, citing strong demand across all end markets despite short lead times affecting backlog visibility [21][22] - The company is not currently seeing significant impacts from macroeconomic uncertainties or tariff-related activities [39][40] Other Important Information - The company is focusing on maintaining supply chain stability and adapting swiftly to market changes [5] - Inventory levels are low, and the company is expanding its supply chains to meet customer demand [75][76] Q&A Session Summary Question: Can you provide insights on the September guidance and the six end markets? - Management indicated enterprise data is expected to grow between 20% to 30% sequentially, with other lines of business showing high single-digit growth [8] Question: What is the status of AI ASIC programs? - Multiple customers are engaged, and the company has many design wins, indicating a positive outlook for the enterprise data market [10][11] Question: Can you comment on the enterprise data guidance for the full year? - The market remains dynamic, and while Q4 guidance is not provided, Q3 is expected to grow sequentially [16][18] Question: How does the company view macroeconomic uncertainties? - Management focuses on internal execution and customer demands, stating that market conditions are being managed effectively [20][21] Question: What is the outlook for the automotive segment? - The automotive segment is expected to see growth in Q3 and Q4, driven by new content opportunities [32][33] Question: Can you elaborate on customer concentration and growth opportunities? - The company is returning to a more diversified customer base, with no single customer expected to exceed 5% of sales [80][81] Question: What are the growth drivers for 2026? - The company anticipates broad-based growth, particularly in enterprise data opportunities [85]

Press Release Overview [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) MPS announced Q2 2025 financial results, with revenue up 31.0% YoY to $664.6 million and strong GAAP and non-GAAP profit growth Key Financial Data for Q2 2025 (GAAP vs. Non-GAAP) | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YoY Growth | Q1 2025 (Million USD) | QoQ Growth | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 664.6 | 507.4 | 31.0% | 637.6 | 4.2% | | **GAAP Gross Margin** | 55.1% | 55.3% | -0.2 pp | - | - | | **Non-GAAP Gross Margin** | 55.5% | 55.7% | -0.2 pp | - | - | | **GAAP Operating Expenses** | 201.3 | 164.0 | 22.7% | - | - | | **Non-GAAP Operating Expenses** | 137.6 | 111.7 | 23.2% | - | - | | **GAAP Operating Income** | 164.8 | 116.5 | 41.5% | - | - | | **Non-GAAP Operating Income** | 231.2 | 171.0 | 35.2% | - | - | | **GAAP Net Income** | 133.7 | 100.4 | 33.2% | - | - | | **Non-GAAP Net Income** | 202.2 | 155.1 | 30.4% | - | - | | **GAAP Diluted EPS** | 2.78 | 2.05 | 35.6% | - | - | | **Non-GAAP Diluted EPS** | 4.21 | 3.17 | 32.8% | - | - | [Six Months Ended June 30, 2025 Financial Highlights](index=3&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Financial%20Highlights) For H1 2025, MPS revenue reached $1.3021 billion, up 34.9% YoY, showing substantial GAAP and non-GAAP net income and EPS growth Key Financial Data for H1 2025 (GAAP vs. Non-GAAP) | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | YoY Growth | | :--- | :--- | :--- | :--- | | **Revenue** | 1,302.1 | 965.3 | 34.9% | | **GAAP Gross Margin** | 55.2% | 55.2% | 0.0 pp | | **Non-GAAP Gross Margin** | 55.6% | 55.7% | -0.1 pp | | **GAAP Operating Expenses** | 385.7 | 321.0 | 20.2% | | **Non-GAAP Operating Expenses** | 271.1 | 215.1 | 26.0% | | **GAAP Operating Income** | 333.5 | 212.0 | 57.3% | | **Non-GAAP Operating Income** | 452.8 | 322.6 | 40.4% | | **GAAP Net Income** | 267.5 | 192.9 | 38.7% | | **Non-GAAP Net Income** | 396.0 | 292.6 | 35.3% | | **GAAP Diluted EPS** | 5.57 | 3.94 | 41.4% | | **Non-GAAP Diluted EPS** | 8.25 | 5.98 | 37.9% | [Revenue by End Market](index=4&type=section&id=Revenue%20by%20End%20Market) Q2 and H1 2025 saw significant growth across key end markets, with Storage & Computing emerging as the largest revenue contributor Revenue by End Market (Thousand USD) | End Market | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Storage & Computing** | 195,320 | 114,955 | 383,831 | 221,076 | | **Automotive** | 145,132 | 87,193 | 290,036 | 174,285 | | **Enterprise Data** | 143,964 | 187,211 | 276,888 | 336,938 | | **Communications** | 73,783 | 43,566 | 145,454 | 90,211 | | **Consumer** | 59,663 | 42,229 | 116,610 | 80,303 | | **Industrial** | 46,712 | 32,277 | 89,309 | 62,503 | | **Total** | 664,574 | 507,431 | 1,302,128 | 965,316 | [CEO Statement](index=4&type=section&id=CEO%20Statement) CEO Michael Hsing affirmed MPS's long-term growth strategy, emphasizing its transition to a comprehensive silicon-based solutions provider - CEO Michael Hsing emphasized the company's transition from a "**single-chip semiconductor supplier**" to a "**comprehensive silicon-based solutions provider**," with its long-term growth strategy remaining unchanged[5](index=5&type=chunk) Business Outlook [Q3 2025 Financial Targets](index=4&type=section&id=Q3%202025%20Financial%20Targets) MPS forecasts Q3 2025 revenue of $710-730 million, with GAAP gross margin at 54.9-55.5% and non-GAAP at 55.2-55.8% Q3 2025 Financial Targets | Metric | Range (Million USD) | | :--- | :--- | | **Revenue** | $710.0 - $730.0 | | **GAAP Gross Margin** | 54.9% - 55.5% | | **Non-GAAP Gross Margin** | 55.2% - 55.8% | | **GAAP Operating Expenses** | $201.3 - $207.3 | | **Non-GAAP Operating Expenses** | $143.0 - $147.0 | | **Stock-based Compensation and Related Expenses** | $60.1 - $62.1 (approximately $1.8 included in cost of sales) | | **Interest and Other Income (excluding foreign exchange gains/losses)** | $6.4 - $6.8 | | **Non-GAAP Tax Rate (2025)** | 15% | | **Fully Diluted Shares** | 47.9 - 48.3 (Million Shares) | [Non-GAAP Financial Measures Explanation](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) MPS uses non-GAAP metrics to evaluate core operational performance, providing a comprehensive view of results and trends when combined with GAAP, enhancing comparability - MPS uses non-GAAP financial measures (such as non-GAAP net income, gross margin, operating expenses, operating income, other income, and income before income taxes) to evaluate core operational performance, believing they provide a more comprehensive view of operating results and trends when used in conjunction with GAAP metrics[6](index=6&type=chunk) - Non-GAAP measures primarily exclude the impact of stock-based compensation and related expenses, deferred compensation plan expenses, amortization of acquisition-related intangible assets, and related tax effects[6](index=6&type=chunk) - The company advises investors that non-GAAP financial measures used by other companies may not be comparable to those used by MPS[6](index=6&type=chunk)[8](index=8&type=chunk) Additional Information [Earnings Commentary & Webinar](index=6&type=section&id=Earnings%20Commentary%20%26%20Webinar) MPS has published Q2 2025 operating results commentary and will host a Q&A webinar on July 31, 2025, to discuss financial performance - Operating results commentary for the quarter ended June 30, 2025, is available on the MPS investor relations website[9](index=9&type=chunk) - MPS plans to host a Q&A session via Zoom webinar on July 31, 2025, at 2:00 PM PT / 5:00 PM ET to discuss financial results[10](index=10&type=chunk) [Safe Harbor Statement](index=6&type=section&id=Safe%20Harbor%20Statement) This press release and webinar contain forward-looking statements about future performance, subject to risks and uncertainties that could cause actual results to differ materially - This press release contains forward-looking statements regarding expectations for future revenue, gross margin, operating expenses, market outlook, new product development, market share growth, and expense reductions[11](index=11&type=chunk) - These statements are based on current expectations but involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from those stated[11](index=11&type=chunk) - Risk factors include global economic uncertainties (such as the Russia-Ukraine conflict, Middle East conflicts, and inflation), changes in government regulations, export controls, market acceptance of products, supply chain limitations, industry competition, acquisition integration risks, and litigation risks[11](index=11&type=chunk) [Company Information](index=7&type=section&id=Company%20Information) MPS is a fabless global company providing high-performance, semiconductor-based power electronics solutions, leveraging deep system-level knowledge and proprietary technology - Monolithic Power Systems (MPS) is a fabless global company focused on providing high-performance, semiconductor-based power electronics solutions[12](index=12&type=chunk) - The company's mission is to reduce energy and material consumption to improve all aspects of quality of life[12](index=12&type=chunk) - MPS's core strengths include deep system-level knowledge, strong semiconductor expertise, and innovative proprietary technologies in semiconductor processes, system integration, and packaging[12](index=12&type=chunk) [Contact Information](index=7&type=section&id=Contact%20Information) Investors can contact Bernie Blegen, Executive Vice President and Chief Financial Officer, for further information - Investors may contact Bernie Blegen, Executive Vice President and Chief Financial Officer, at MPSInvestor.Relations@monolithicpower.com or by phone at 408-826-0777[14](index=14&type=chunk) Financial Statements (Unaudited) [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, MPS's total assets increased to **$3.9722 billion**, up **9.8%** from December 31, 2024, driven by cash and short-term investments Condensed Consolidated Balance Sheets Summary (Thousand USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets:** | | | | Cash and Cash Equivalents | 787,382 | 691,816 | | Short-term Investments | 358,695 | 171,130 | | Inventory | 490,642 | 419,611 | | Total Current Assets | 1,918,757 | 1,565,053 | | Net Deferred Tax Assets | 1,309,981 | 1,326,840 | | **Total Assets** | 3,972,210 | 3,617,097 | | **Liabilities:** | | | | Total Current Liabilities | 383,508 | 294,567 | | **Total Liabilities** | 570,142 | 471,330 | | **Stockholders' Equity:** | | | | Retained Earnings | 2,603,177 | 2,487,461 | | **Total Stockholders' Equity** | 3,402,068 | 3,145,767 | | **Total Liabilities and Stockholders' Equity** | 3,972,210 | 3,617,097 | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) In Q2 2025, MPS reported revenue of **$664.6 million** and net income of **$133.7 million**; H1 revenue was **$1.3021 billion** and net income **$267.5 million**, reflecting significant profit growth Condensed Consolidated Statements of Operations Summary (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 664,574 | 507,431 | 1,302,128 | 965,316 | | **Cost of Sales** | 298,558 | 226,853 | 582,882 | 432,297 | | **Gross Profit** | 366,016 | 280,578 | 719,246 | 533,019 | | **Research and Development Expenses** | 96,266 | 77,945 | 188,493 | 153,935 | | **Selling, General and Administrative Expenses** | 104,992 | 86,097 | 197,236 | 167,061 | | **Total Operating Expenses** | 201,258 | 164,042 | 385,729 | 320,996 | | **Operating Income** | 164,758 | 116,536 | 333,517 | 212,023 | | **Other Income, Net** | 12,220 | 7,512 | 17,351 | 17,052 | | **Income Before Income Taxes** | 176,978 | 124,048 | 350,868 | 229,075 | | **Income Tax Expense** | 43,252 | 23,682 | 83,351 | 36,168 | | **Net Income** | 133,726 | 100,366 | 267,517 | 192,907 | | **Diluted Earnings Per Share** | 2.78 | 2.05 | 5.57 | 3.94 | GAAP to Non-GAAP Reconciliations (Unaudited) [Net Income Reconciliation](index=10&type=section&id=Net%20Income%20Reconciliation) MPS's non-GAAP net income for Q2 and H1 2025 significantly exceeded GAAP net income after adjustments for stock-based compensation and other non-cash items, reflecting core profitability Net Income Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income (GAAP)** | 133,726 | 100,366 | 267,517 | 192,907 | | Stock-based Compensation and Related Expenses | 60,280 | 52,704 | 114,091 | 104,473 | | Amortization of Acquisition-related Intangible Assets | 320 | 372 | 640 | 663 | | Net Deferred Compensation Plan Expenses | 281 | 106 | 275 | 153 | | Tax Impact | 7,573 | 1,528 | 13,470 | (5,628) | | **Non-GAAP Net Income** | 202,180 | 155,076 | 395,993 | 292,568 | | **Non-GAAP Diluted Earnings Per Share** | 4.21 | 3.17 | 8.25 | 5.98 | [Gross Margin Reconciliation](index=11&type=section&id=Gross%20Margin%20Reconciliation) Non-GAAP gross margin for Q2 and H1 2025 was slightly higher than GAAP gross margin, after excluding stock-based compensation and other expenses, indicating strong core business gross profit Gross Margin Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Gross Profit (GAAP)** | 366,016 | 280,578 | 719,246 | 533,019 | | **Gross Margin (GAAP)** | 55.1% | 55.3% | 55.2% | 55.2% | | Stock-based Compensation and Related Expenses | 1,915 | 1,635 | 3,621 | 3,535 | | Amortization of Acquisition-related Intangible Assets | 287 | 339 | 574 | 597 | | Deferred Compensation Plan Expenses | 605 | 100 | 442 | 540 | | **Non-GAAP Gross Profit** | 368,823 | 282,652 | 723,883 | 537,691 | | **Non-GAAP Gross Margin** | 55.5% | 55.7% | 55.6% | 55.7% | [Operating Expenses Reconciliation](index=11&type=section&id=Operating%20Expenses%20Reconciliation) Non-GAAP operating expenses for Q2 and H1 2025 were lower than GAAP operating expenses, after excluding stock-based compensation and other expenses, indicating effective core operational cost control Operating Expenses Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Expenses (GAAP)** | 201,258 | 164,042 | 385,729 | 320,996 | | Stock-based Compensation and Related Expenses | (58,365) | (51,069) | (110,470) | (100,938) | | Amortization of Acquisition-related Intangible Assets | (33) | (33) | (66) | (66) | | Deferred Compensation Plan Expenses | (5,256) | (1,273) | (4,063) | (4,899) | | **Non-GAAP Operating Expenses** | 137,604 | 111,667 | 271,130 | 215,093 | [Operating Income Reconciliation](index=12&type=section&id=Operating%20Income%20Reconciliation) Non-GAAP operating income for Q2 and H1 2025 exceeded GAAP operating income, after adding back stock-based compensation and other expenses, demonstrating strong core business operational performance Operating Income Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Income (GAAP)** | 164,758 | 116,536 | 333,517 | 212,023 | | Stock-based Compensation and Related Expenses | 60,280 | 52,704 | 114,091 | 104,473 | | Amortization of Acquisition-related Intangible Assets | 320 | 372 | 640 | 663 | | Deferred Compensation Plan Expenses | 5,861 | 1,373 | 4,505 | 5,439 | | **Non-GAAP Operating Income** | 231,219 | 170,985 | 452,753 | 322,598 | [Other Income, Net Reconciliation](index=12&type=section&id=Other%20Income%2C%20Net%20Reconciliation) Non-GAAP other income, net, for Q2 and H1 2025 was slightly lower than GAAP other income, net, after excluding deferred compensation plan income Other Income, Net Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Other Income, Net (GAAP)** | 12,220 | 7,512 | 17,351 | 17,052 | | Deferred Compensation Plan Income | (5,580) | (1,266) | (4,230) | (5,285) | | **Non-GAAP Other Income, Net** | 6,640 | 6,246 | 13,121 | 11,767 | [Income Before Income Taxes Reconciliation](index=12&type=section&id=Income%20Before%20Income%20Taxes%20Reconciliation) Non-GAAP income before income taxes for Q2 and H1 2025 exceeded GAAP income before income taxes, after adjusting for stock-based compensation and other non-cash items, highlighting core profitability Income Before Income Taxes Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Income Before Income Taxes (GAAP)** | 176,978 | 124,048 | 350,868 | 229,075 | | Stock-based Compensation and Related Expenses | 60,280 | 52,704 | 114,091 | 104,473 | | Amortization of Acquisition-related Intangible Assets | 320 | 372 | 640 | 663 | | Net Deferred Compensation Plan Expenses | 281 | 106 | 275 | 153 | | **Non-GAAP Income Before Income Taxes** | 237,859 | 177,230 | 465,874 | 334,364 | [Q3 2025 Outlook: Gross Margin Reconciliation](index=13&type=section&id=Q3%202025%20Outlook%3A%20Gross%20Margin%20Reconciliation) MPS projects Q3 2025 non-GAAP gross margin between 55.2% and 55.8%, slightly above GAAP forecasts after adjusting for stock-based compensation and other expenses Q3 2025 Outlook: Gross Margin Reconciliation | Item | Q3 2025 (Low) | Q3 2025 (High) | | :--- | :--- | :--- | | **Gross Margin (GAAP)** | 54.9% | 55.5% | | Stock-based Compensation and Other Expenses | 0.3% | 0.3% | | **Non-GAAP Gross Margin** | 55.2% | 55.8% | [Q3 2025 Outlook: Operating Expenses Reconciliation](index=13&type=section&id=Q3%202025%20Outlook%3A%20Operating%20Expenses%20Reconciliation) MPS anticipates Q3 2025 non-GAAP operating expenses to range from **$143 million** to **$147 million**, significantly lower than GAAP forecasts after exclusions Q3 2025 Outlook: Operating Expenses Reconciliation (Thousand USD) | Item | Q3 2025 (Low) | Q3 2025 (High) | | :--- | :--- | :--- | | **Operating Expenses (GAAP)** | 201,300 | 207,300 | | Stock-based Compensation and Other Expenses | (58,300) | (60,300) | | **Non-GAAP Operating Expenses** | 143,000 | 147,000 |

Non-GAAP net income (1) was $202.2 million and $4.21 per diluted share for the quarter ended June 30, 2025, excluding $60.3 million for stock-based compensation and related expenses, $0.3 million for amortization of acquisition-related intangible assets, $0.3 million for net deferred compensation plan expense and $7.6 million for related tax effects, compared with $155.1 million and $3.17 per diluted share for the quarter ended June 30, 2024, excluding $52.7 million for stock-based compensation and related ...

Q2 2025 Financial Summary (Unaudited) GAAP | | | | | QoQ | | | --- | --- | --- | --- | --- | --- | | | Q2'25 | Q1'25 | Q2'24 | ChangeYoY Change | | | Revenue ($k) | $664,574 | $637,554 | $507,431 | Up 4.2% | Up 31.0% | | Gross Margin | 55.1% | 55.4% | 55.3% | Down 0.3 ptsDown 0.2 pts | | | Opex ($k) | $201,258 | $184,471 | $164,042 | Up 9.1% | Up 22.7% | | Operating Margin | 24.8% | 26.5% | 23.0% | Down 1.7 pts | Up 1.8 pts | | Net income ($k) | $133,726 | $133,791 | $100,366 | Flat | Up 33.2% | | Diluted E ...

Key Takeaways Monolithic Power Systems, Inc. (MPWR) is set to release second-quarter 2025 results on July 31, after the closing bell. It delivered a four-quarter earnings surprise of 2.20%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 1%. This Kirkland, WA-based company is likely to record higher revenues in the to-be-reported quarter, driven by solid traction in several verticals. Management's effort to expand and diversify its ...

Core Viewpoint - Analysts project that Monolithic Power (MPWR) will report quarterly earnings of $4.12 per share, reflecting a 30% year-over-year increase, with revenues expected to reach $650.41 million, a 28.2% increase from the same quarter last year [1]. Revenue Estimates by End Market - Revenue from the Storage and Computing market is forecasted to be $185.05 million, indicating a year-over-year increase of 61.1% [5]. - Revenue from the Communications market is expected to reach $75.73 million, representing a 73.7% increase year-over-year [5]. - Revenue from the Automotive market is projected at $149.41 million, showing a 71.4% increase from the prior-year quarter [5]. - Revenue from the Enterprise Data market is estimated to be $137.45 million, indicating a decline of 26.6% from the prior-year quarter [6]. - Revenue from the Industrial market is expected to be $44.27 million, reflecting a 37.1% year-over-year increase [6]. - Revenue from the Consumer market is projected at $58.56 million, indicating a 38.8% increase from the prior-year quarter [7]. Analyst Consensus and Market Performance - The consensus EPS estimate for the quarter has not changed over the past 30 days, indicating stability in analysts' projections [2]. - Revisions to earnings projections are critical for predicting investor behavior and are linked to short-term stock price performance [3]. - Monolithic shares have decreased by 2.9% in the past month, contrasting with a 4.9% increase in the Zacks S&P 500 composite [7]. - With a Zacks Rank 2 (Buy), MPWR is expected to outperform the overall market in the near future [7].

Core Insights - Return on Invested Capital (ROIC) is a critical metric for assessing future investment performance, indicating a company's ability to generate returns from investor capital [1] - High ROICs suggest a competitive advantage, which can lead to stock market outperformance over time [2] Company Analysis: AppLovin - AppLovin has achieved a ROIC of approximately 52% and its shares have increased by about 348% over the past 52 weeks [3][4] - The company is transitioning from mobile game advertising to e-commerce advertising, generating $1 billion in annual run-rate revenues in this new sector [4][5] - The sustainability of AppLovin's high ROIC will depend on the success of its e-commerce push, as early results are positive but still in the experimental phase [5] Company Analysis: Monolithic Power Systems - Monolithic Power Systems has generated a ROIC of nearly 56%, but its shares have decreased by around 10% in the same period [7][8] - The company's relationship with NVIDIA has been a key advantage, but NVIDIA is diversifying its suppliers, raising concerns about Monolithic's future ROIC [8][9] - Approximately 68% of Monolithic's revenue comes from markets outside of data centers, which could help offset potential declines in business with NVIDIA [10] - Despite potential competition for NVIDIA's business, Monolithic is expected to maintain a high overall ROIC, which is favorable for its future share performance [11] Overall Market Outlook - Both AppLovin and Monolithic Power Systems have demonstrated strong ROIC, suggesting potential for continued outperformance [12] - AppLovin's rapid share price increase and entry into a new market may present more uncertainty compared to Monolithic's established advantages [12]

Core Insights - ECARX Holdings Inc. has signed a strategic cooperation agreement with Monolithic Power Systems, focusing on automotive intelligence and robotics, aiming to establish a global supply chain and intelligent industrial ecosystem [1][2] - The partnership will enhance product adaptation, validation, and system optimization, reducing development cycles and accelerating time-to-market for customers [2] - MPS will leverage its global R&D and engineering support to help ECARX build a resilient supply chain and accelerate product rollout, supporting ECARX's global expansion strategy [2][4] Company Overview - ECARX is a global automotive technology provider delivering turnkey solutions for next-generation smart vehicles, including system on a chip (SoC) and central computing platforms [5] - Founded in 2017 and listed on Nasdaq in 2022, ECARX has over 1,800 employees across 12 locations and its products are present in over 8.7 million vehicles worldwide [6] Partner Overview - Monolithic Power Systems, founded in 1997, specializes in high-performance semiconductor-based power electronics solutions, focusing on reducing energy and material consumption [7] - MPS is recognized for its deep system-level knowledge, semiconductor expertise, and innovative technologies, enabling reliable and energy-efficient solutions across various sectors [3][7]

Group 1: AI Transformation in the Workforce - Tech companies are increasingly replacing human workers with AI, with Amazon's CEO stating that human jobs are disappearing because AI is cheaper and smarter [5][6] - Amazon is projecting a reduction in its corporate workforce over the next few years, urging employees to become proficient in AI tools, which may lead to them training AI to replace their own roles [6][7] - The shift from human labor to AI is seen as an unstoppable trend, with significant implications for middle management and white-collar workers [6] Group 2: AI Infrastructure and Energy Demand - The electricity demand for AI technologies is substantial, with ChatGPT consuming enough electricity annually to power 20,000 American homes, and this usage is expected to double every two to three years [7] - AI data centers require significant cooling systems to prevent overheating of processors, which is critical to avoid costly outages [8] Group 3: Investment Opportunity in Monolithic Power Systems (MPWR) - Monolithic Power Systems (MPWR) is identified as a key player in the AI growth sector, providing essential power regulation technology that supports AI processors [9] - MPWR has a strong dividend track record, increasing its dividend by 25% annually, and has a modest payout ratio of 14%, indicating potential for future dividend growth [9][11] - The company has experienced significant revenue growth of 672% over the past decade, with dividends surging 680% and stock prices increasing over 1,300% [11] - MPWR is expanding into new markets, including automotive and telecommunications, which are driving revenue growth and cash flow [12] - The company's fabless business model allows for rapid scaling without heavy capital expenditures, further enhancing its profitability and dividend potential [12]

Core Viewpoint - Monolithic Power Systems, Inc. (MPS) is set to report its financial results for the second quarter ended June 30, 2025, on July 31, 2025, after market close [1][2]. Company Overview - MPS is a fabless global company specializing in high-performance, semiconductor-based power electronics solutions, founded in 1997 by CEO Michael Hsing [4]. - The company's mission focuses on reducing energy and material consumption to enhance quality of life and promote sustainability [4]. - MPS possesses three core strengths: deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in semiconductor processes, system integration, and packaging [4]. - These advantages allow MPS to deliver reliable, compact, and energy-efficient solutions that are cost-effective and environmentally responsible, ensuring consistent returns for stockholders [4]. Upcoming Events - MPS will provide written commentary on its second-quarter results alongside the earnings announcement [2]. - A question-and-answer conference call is scheduled for 2:00 p.m. PT / 5:00 p.m. ET, accessible via a Zoom webcast [3]. - A replay of the conference call will be available for one year on the Investor Relations website two hours after the live event [3].