Core Viewpoint - Monolithic Power Systems (MPS) has demonstrated strong financial performance and growth potential, particularly in the AI hardware infrastructure sector, following a solid quarterly earnings report and optimistic future guidance [2][3][12]. Financial Performance - MPS reported record quarterly revenue of $664.6 million for Q2 2025, marking a 31.0% increase year-over-year and surpassing analyst expectations [3]. - Non-GAAP earnings per share (EPS) for Q2 2025 were $4.21, exceeding the consensus estimate of $4.12 [3]. - For Q3 2025, management projected revenue between $710 million and $730 million, indicating an upward revision of growth expectations [3]. Industry Context - The demand for power chips is driven by the energy-intensive requirements of AI models, which pose challenges for data centers in terms of energy consumption [4]. - MPS has positioned itself as a key player in this market by providing efficient power solutions that address energy bottlenecks in modern data centers [5][6]. Strategic Positioning - MPS has begun initial shipments of power solutions to support customers' ASIC-based AI products, highlighting its role in the AI hardware buildout [5]. - The company's Storage & Computing business segment experienced a significant growth of 70.0% year-over-year, reflecting its strategic advantage in the AI sector [5]. Analyst Sentiment - Following the earnings release, analysts have raised their price targets for MPS, with a 12-month stock price forecast of $838.09, indicating a 5.62% upside [7]. - Major firms, including Citigroup and Stifel Nicolaus, have reiterated Buy or Outperform ratings, signaling confidence in the company's strategic execution [8]. - Over 93% of MPS's stock is held by institutional investors, indicating strong conviction in the company's long-term strategy [9][10].

Core Insights - Recent earnings reports from key players in the semiconductor industry have exceeded Wall Street estimates, prompting analysts to raise their price targets significantly, indicating a potential continuation of the semiconductor rally as end-market demand improves and long-term trends like AI and automation remain strong [1] Group 1: Lam Research - Lam Research reported strong earnings on July 30, beating sales and adjusted EPS expectations, yet shares fell over 4% due to concerns about its business in China [2][3] - Analysts increased their price targets for Lam Research by an average of over $10, with a consensus target around $107, implying approximately 9% upside [3][4] - The highest target from TD Cowen is $125, suggesting a potential upside of 27% [4] Group 2: Impinj - Impinj, which produces small chips for tracking goods, surpassed Q2 expectations, leading to a 26% surge in shares on July 31 [6] - Analysts raised their price targets by an average of 30%, with a consensus target around $163, indicating shares are fairly valued [6][7] - The European Union's Digital Product Passport law, effective for textiles in 2027, could provide significant long-term sales opportunities for Impinj [7][8] Group 3: Monolithic Power Systems - Monolithic Power Systems delivered better-than-expected Q2 results, resulting in a share price increase of over 10% on August 1 [9] - Analysts raised their price targets by an average of $42, with a new average target of $850, implying around 2.3% upside [10] - The stock has outperformed Wall Street expectations historically, with a total return of nearly 31% since May 7 [11][12] Group 4: Cadence Design Systems - Cadence Design Systems beat expectations in Q2 and raised its full-year guidance, leading to a nearly 10% gain in shares on July 29 [14] - The MarketBeat consensus target is $364, closely matching the stock's price, but updated targets suggest an average of $389, indicating nearly 7% upside [15][16] - The overall sentiment for Cadence has improved significantly following its strong performance [16]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, with detailed notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, presenting assets, liabilities, and equity for the reported periods | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total assets | $3,972,210 | $3,617,097 | $355,113 | 9.8% | | Total liabilities | $570,142 | $471,330 | $98,812 | 21.0% | | Total stockholders' equity | $3,402,068 | $3,145,767 | $256,301 | 8.1% | | Cash and cash equivalents | $787,382 | $691,816 | $95,566 | 13.8% | | Short-term investments | $358,695 | $171,130 | $187,565 | 109.6% | | Inventories | $490,642 | $419,611 | $71,031 | 16.9% | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's financial performance, including revenue, net income, and diluted EPS for the reported periods | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | :------- | | Revenue | $664,574 | $507,431 | $157,143 | 31.0% | | Net income | $133,726 | $100,366 | $33,360 | 33.2% | | Diluted EPS | $2.78 | $2.05 | $0.73 | 35.6% | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------- | | Revenue | $1,302,128 | $965,316 | $336,812 | 34.9% | | Net income | $267,517 | $192,907 | $74,610 | 38.7% | | Diluted EPS | $5.57 | $3.94 | $1.63 | 41.4% | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section details the company's comprehensive income, including net income and other comprehensive income components | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | :------- | | Comprehensive income | $153,359 | $96,421 | $56,938 | 59.0% | | Foreign currency translation adjustments | $19,634 | $(4,313) | $23,947 | -555.2% | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------- | | Comprehensive income | $292,337 | $175,475 | $116,862 | 66.6% | | Foreign currency translation adjustments | $24,773 | $(18,135) | $42,908 | -236.6% | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in stockholders' equity, including dividends, stock-based compensation, and stock repurchases | Metric | June 30, 2025 (in thousands) | January 1, 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Total stockholders' equity | $3,402,068 | $3,145,767 | $256,301 | 8.1% | | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | :------- | | Dividends declared per share | $1.56 | $1.25 | $0.31 | 24.8% | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------- | | Dividends declared per share | $3.12 | $2.50 | $0.62 | 24.8% | | Stock-based compensation expense | $112,914 | $98,227 | $14,687 | 14.9% | | Repurchases of common stock | $(2,484) | $(8,626) | $6,142 | -71.2% | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash flow activities from operations, investing, and financing for the reported periods | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------- | | Net cash provided by operating activities | $494,024 | $389,026 | $104,998 | 27.0% | | Net cash used in investing activities | $(273,283) | $(269,366) | $(3,917) | 1.5% | | Net cash used in financing activities | $(135,327) | $(123,638) | $(11,689) | 9.5% | | Net increase (decrease) in cash, cash equivalents and restricted cash | $95,583 | $(10,581) | $106,164 | -1003.3% | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. BASIS OF PRESENTATION](index=10&type=section&id=Note%201.%20BASIS%20OF%20PRESENTATION) This note explains the basis of presentation for the unaudited financial statements, confirming U.S. GAAP compliance and no significant accounting policy changes - The financial statements are unaudited and prepared in accordance with SEC rules and U.S. GAAP, reflecting only normal recurring adjustments[22](index=22&type=chunk)[23](index=23&type=chunk) - No changes to the Company's significant accounting policies occurred during the three and six months ended June 30, 2025[24](index=24&type=chunk) - New accounting pronouncements, ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), are effective for annual periods beginning January 1, 2025, and January 1, 2027, respectively, and will result in expanded disclosures[26](index=26&type=chunk)[27](index=27&type=chunk) [Note 2. REVENUE RECOGNITION](index=11&type=section&id=Note%202.%20REVENUE%20RECOGNITION) This note details the company's revenue recognition policies, primarily from product sales, with a significant portion made through third-party distributors - Revenue is primarily generated from product sales, including integrated circuits and power modules, with royalty and wafer testing services being insignificant[28](index=28&type=chunk) - **83% of total sales** for the three and six months ended June 30, 2025, were made through distribution arrangements, a decrease from 89% in the prior year[29](index=29&type=chunk) - Variable consideration, including price adjustments and stock rotation rights, reduces the transaction price and is recognized in the same period as the associated revenue[33](index=33&type=chunk)[34](index=34&type=chunk) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Customer prepayments | $7,200 | $6,900 | $300 | 4.3% |

Core Insights - Monolithic Power Systems, Inc. (MPWR) reported strong second-quarter 2025 results, with adjusted earnings and revenues exceeding the Zacks Consensus Estimate [2][10] - The company achieved record revenues driven by robust performance in Automotive, Storage and Computing, and Communication sectors [3] Financial Performance - Net income on a GAAP basis was $133.7 million or $2.78 per share, up from $100.4 million or $2.05 per share year-over-year, primarily due to top-line growth [4] - Non-GAAP net income increased to $202.2 million or $4.21 per share from $155.1 million or $3.17 per share in the prior-year quarter, surpassing the Zacks Consensus Estimate by 9 cents [4] - Revenues reached $664.6 million, a 31% increase from $507.4 million in the year-ago quarter, beating the Zacks Consensus Estimate of $635 million [5] Segment Performance - Storage and Computing revenues were $195.3 million, reflecting a 70% year-over-year growth driven by strong demand for memory and notebook solutions [6] - Automotive revenues surged 66.4% to $145.1 million compared to $87.2 million in the year-ago quarter [10] - Industrial revenues increased to $46.7 million from $32.3 million, while Communications revenues rose to $73.8 million from $43.6 million [7] Operational Metrics - Non-GAAP gross margin was 55.5%, slightly down from 55.7% in the prior year [8] - Non-GAAP operating expenses were $137.6 million, up from $111.7 million in the previous year, while non-GAAP operating income rose to $231.2 million from $171 million [8] Cash Flow and Liquidity - The company generated an operating cash flow of $237.6 million in the June quarter, compared to $141 million in the prior-year quarter [11] - As of June 30, 2025, cash and cash equivalents totaled $787.4 million, with $113.4 million in other long-term liabilities [11] Future Outlook - For Q3 2025, the company estimates revenues between $710 million and $730 million, with non-GAAP gross margin expected to be between 55.2% and 55.8% [12]

Core Insights - Monolithic Power (MPWR) reported quarterly earnings of $4.21 per share, exceeding the Zacks Consensus Estimate of $4.12 per share, and showing a significant increase from $3.17 per share a year ago, representing an earnings surprise of +2.18% [1] - The company achieved revenues of $664.57 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.18% and up from $507.43 million year-over-year [2] - Monolithic has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The future performance of Monolithic's stock will largely depend on management's commentary during the earnings call and the sustainability of its immediate price movement based on the recently released numbers [3][4] - The current consensus EPS estimate for the upcoming quarter is $4.41, with expected revenues of $682.65 million, and for the current fiscal year, the EPS estimate is $17.08 on revenues of $2.67 billion [7] Industry Context - The Semiconductor - Analog and Mixed industry, to which Monolithic belongs, is currently ranked in the top 13% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]

Financial Data and Key Metrics Changes - In Q2 2025, Monolithic Power Systems (MPS) achieved record quarterly revenue of $664.6 million, which is 4.2% higher than Q1 2025 and 31% higher than Q2 2024 [4][5] - The company continues to see diversified revenue growth across all markets, indicating a strong performance driven by consistent execution and innovation [5][6] Business Line Data and Key Metrics Changes - Storage and compute revenue grew sequentially, reflecting strong demand for memory and notebook power solutions [5] - The enterprise data segment is expected to grow between 20% to 30% sequentially in Q3 2025, with a seasonal uplift in consumer markets [10][20] Market Data and Key Metrics Changes - The company is experiencing strong demand across all end markets, with particular growth in enterprise data and AI ASIC programs [12][25] - The automotive segment is anticipated to flatten in the middle of the year but is expected to pick up towards the end of Q3 and Q4 as new content opportunities come online [37] 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 expanding into new markets [5][6] - The company aims to maintain supply chain stability and adapt swiftly to market changes, which is part of its long-term growth strategy [6] 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 order patterns [25][26] - The company does not foresee significant changes in customer ordering patterns related to tariffs, believing that the current cycle is driving demand [43][44] Other Important Information - The company is focusing on maintaining a diversified customer base, with expectations to return to a more normal profile of customer contributions by the end of the year [91] - MPS has low inventory levels, which is seen as a positive indicator of operational efficiency [48][81] Q&A Session Summary Question: Can you provide insights on the September setup and growth expectations? - Management indicated enterprise data is expected to grow between 20% to 30% sequentially, with a seasonal uplift in consumer markets [10] Question: What is the outlook for AI ASIC programs? - The company is engaging multiple customers and has numerous design wins, indicating a positive outlook for AI ASIC programs [12] Question: How do you view macroeconomic uncertainties affecting your business? - Management emphasized focusing on internal execution and customer demands, stating that they do not listen to competitors' calls [24][25] Question: What is the growth outlook for the automotive segment? - The automotive segment is expected to flatten in the middle of the year but is anticipated to pick up towards the end of Q3 and Q4 [37] Question: Can you elaborate on the enterprise data segment's growth rates? - Management noted that the lines between traditional CPU and AI are blurring, making it difficult to distinguish growth rates between the two [42] Question: What is the company's capacity and inventory situation? - MPS has the capacity to support $4 billion in revenue, with low inventory levels indicating strong demand [82][81] Question: How is customer concentration evolving with the ASIC ramp? - The company expects to return to a more diversified customer base, with no single customer contributing more than mid to high single digits [91]

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 ...